Ministers: police and prosecutors warned they have created a ‘permissive culture’ of fraud

Ministers, police and prosecutors have created a ‘permissive culture’ for fraud, allowing criminals to fleece billions to help fund human trafficking and the drugs trade, a damning Lords report finds today.

Ministers: police and prosecutors warned they have created a ‘permissive culture’ of fraud

Successive governments have failed to tackle the ‘scourge’ of what has become the country’s most common crime, with more than 40 million UK adults targeted by swindlers in the first half of this year alone.

But despite the ‘exponential growth’ of the offence, criminals ‘face little risk of being caught’, the report says.

Successive governments have failed to tackle the ‘scourge’ of what has become the country’s most common crime

Law enforcement agencies are ‘chronically underfunded’, with a ‘paltry’ 1 per cent of their resources focused on tackling economic crime.

The report said jail sentences for fraud should rise to up to 14 years, from the current ten, to reflect the ‘immeasurable’ emotional as well as financial cost to victims, which leaves many targets traumatised and suffering ‘devastating mental health consequences.’

The savage report follows a Daily Mail investigation which exposed how lack of action from the authorities has turned the UK into the global capital of fraud.

‘Until all fraud-enabling industries fear significant financial, legal and reputational risk for their failure to prevent fraud, they will not act,’ the report said.

It continued: ‘The private sector must be encouraged to combat fraud not only through facing the threat of corporate criminal liability or regulatory action, but also through the creation of a safe harbour for the sharing of data for the purposes of preventing fraud.

‘It is only through a holistic approach involving every part of the fraud chain that fraud will be prevented upstream before money leaves a victim’s account.’

It added that the telecoms sector must do more to tackle scam messages before they reach victims and combat spoof calls.

It added that the telecoms sector must do more to tackle scam messages before they reach victims and combat spoof calls

It added that  the financial services sector has been ‘bounced into action’ due to the burden of reimbursing customers who have lost out due to fraud. The committee suggested payments should be delayed in certain circumstances to allow more time for banks to review risks and contact customers.

‘All stakeholders in the fraud chain, including the payee’s bank, must know they have a duty both to prevent fraud and to address their failings and the victims’ losses once it has occurred,’ the report said.

The committee also called for a ‘united, centrally-led public awareness campaign’, to help tackle fraud.

‘Without fear of facing investigation or justice, organised criminals around the world turn to the UK as a lucrative market to commit fraud.

‘They know that they can operate with limited fear of prosecution or redress for their crimes, the proceeds of which they use to fund further criminal activity including human trafficking and the drugs trade, and they do not have any regard for their victims.’

A Government spokesperson said: ‘We remain absolutely committed to preventing callous predators from stealing cash from hard-working families.

‘We will shortly publish our Fraud Strategy which details how we will stop fraud attempts at source, empower potential victims to recognise and avoid fraud and prosecute more perpetrators.’