FCA reveals 17% increase in fraud offences

The FCA has announced it saw a 17% increase in fraud offences during the last year, in a speech delivered at the Royal United Services Institute, London.

The speech – delivered by the FCA’s executive director of supervision for investment, wholesale and specialists, Megan Butler – revealed the rise was driven by an increase in bank and credit account fraud to 3.8 million offences.

The regulator has also estimated the serious organised crime that money laundering facilitates is costing the UK £37bn every year, while fraud in the UK – which accounts for around one third of all crimes experienced by individuals – has a total estimated cost of £190bn.

The speech also revealed that the UK’s financial sector is overseeing about £90trn changing hands every year – amounting to 39.3 billion payments made in the UK over the last 12 months – a proportion of which is relating to criminal activity.

Butler stated: “Whether inflicting punishing personal losses or threatening the ability of organisations to stay in business, the impact of these offences is devastating. There are, of course, already requirements in place that aim to combat fraud, money laundering and terrorist financing across the financial sector.

“These requirements focus on the need for effective systems and controls in firms to detect, disrupt and stop criminal activity. But, the fast pace of technological change and ever-evolving nature of criminals means that these systems and controls do not always change as quickly as the threats themselves.”

The FCA speech also revealed that the 2,000 firms who were involved in the regulator’s first annual Financial Crime Data Return, told them they had collectively spent over £650m a year on dedicated people to combat fraud, laundering and other financial crimes.

This also didn’t include the efforts of branch staff dealing with customers at counters – who are at the front line of the industry’s efforts to tackle fraudsters and money launderers.

“Those firms made over 360,000 suspicious activity reports to the National Crime Agency in 2017, and identified nearly 120,000 politically exposed persons,” Butler added.

“We already know that, on the whole, most financial institutions are not complacent about the risk, and we can still see this from the figures we continue to collect.”

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