It’s over a year since the home secretary, Theresa May, closed down the National Fraud Agency and transferred its duties in various directions, including to the National Crime Agency and the City of London police.
One of the NFA’s last acts was to publish its annual fraud indicator showing that in 2014 fraud was costing the economy £52 billion a year, of which £21.2bn was to the private sector.
Given that the agencies fighting fraud, for example the Serious Fraud Office, all had their budgets cut by the coalition government and are not going to be protected from further cuts under the new Conservative administration, it seems likely that even more businesses will fall victim to fraudsters and have little chance of getting their money back.
Frances Coulson chairs the fraud committee at R3, the Association of Business Recovery Professionals, and she’s just written an article for CCR Magazine arguing that extending the powers of Insolvency Practitioners (IPs) might support the beleaguered government enforcement agencies.
She notes that IPs ‘can interview under compulsion, search and seize property and prevent individuals from leaving the country’. International recognition means they can pursue fraudsters’ assets globally.
But these powers can only be used in dealing with insolvency, including bankruptcy.
Coulson suggests allowing people as well as companies to be made bankrupt if that is in the public interest, or if through fraud they have caused losses of £15,000 or more to victims, and automatically if they are a director of a company wound up in the public interest.
That might make it harder for individual fraudsters to hide behind companies that close down one day and re-open the next under a slightly different name, as we’ve all seen on TV consumer protection shows such as the BBC’s Watchdog.
Coulson’s next suggestion is make Companies House ‘the first line of defence against fraud’ by requiring directors to provide ID when registering a company, just as you would when opening a bank account.
Also, requiring companies to list all directors ‘howsoever described’ would identify shadow directors and make it harder for anyone who has been banned from holding a directorship to pop up again.
Companies often need help recovering money lost to fraud, and SJ Collections can advise on the best course of action in these cases. But the ideas mentioned above should not just be dismissed as burdening business with more red tape, when fraud is costing business so much money every year.
Over to you home secretary.