A landmark independent review is in progress to address the escalating issue of fraud in the UK, described as the nation’s “biggest crime.” Jonathan Fisher KC has begun the second part of his investigation into “Disclosure and Fraud Offences”, marking the first comprehensive look at fraud legislation in nearly four decades.

The review, announced by the Home Office, the Rt Hon Lord Hanson of Flint, and the Rt Hon Lord Hermer KC, comes at a critical time. Fraud now accounts for over 40% of all recorded offences in England and Wales, a significant surge since Lord Roskill’s 1986 review, which primarily focused on corporate fraud. The current wave of fraud disproportionately affects ordinary consumers and small businesses, often orchestrated by highly organized international gangs.

The financial and emotional toll of fraud is substantial, with recent estimates suggesting that individuals in England and Wales lose over £6.8 billion ($9.1 billion) annually. Modern technology has further amplified the threat, with fraudsters increasingly leveraging artificial intelligence to create sophisticated scams through scambots, deepfakes, and fake websites. These tactics allow criminals to target vast numbers of people rapidly via social media, email, and telephone.

“The criminals driving these schemes are using ever more sophisticated tactics to scam their victims. It is crucial that our criminal justice system keeps pace.”

Lord Hermer KC, UK Attorney General

Fraud Minister Lord Hanson emphasized the government’s determination to combat this crime, stating: “Fraud is a crime which can devastate lives, and I am determined to do everything possible to bring these criminals to justice.” He welcomed the review, adding that it “will help us expand our knowledge base about how to better detect, disrupt and deter fraudsters and deliver a swifter justice for the victims, as part of our Plan for Change.”

Attorney General Lord Hermer KC echoed this sentiment, highlighting the evolving tactics of fraudsters: “Fraud is one of the most pernicious crimes. The criminals driving these schemes are using ever more sophisticated tactics to scam their victims. It is crucial that our criminal justice system keeps pace.” He stressed the indiscriminate nature of fraud and its damaging impact on victims, welcoming the independent review as part of the government’s Plan for Change.

Key challenges for law enforcement

Part two of the Fisher Review will delve into the key challenges faced by law enforcement across the entire fraud lifecycle, from detection and reporting to prosecution, courts, penalties, and rehabilitation. This follows the publication of part one of the review, Disclosure in the Digital Age, which focused on modernizing the disclosure system.

Independent Review Chair, Jonathan Fisher KC, acknowledged the challenges posed by technological advancements: “With the advances in digital technology, it has become much easier for fraudsters to avoid detection, and indeed prosecution, outright.” He explained that the review aims to “scrutinise the main challenges in detecting, investigating, and prosecuting fraud offences, and what can be done to better equip law enforcement to deliver swifter justice for victims.”

The Home Office has stated that the findings of this review will be central to its new, expanded fraud strategy, expected later this year. This strategy will also incorporate international cooperation as a key element in disrupting cross-border fraud networks, aligning with the government’s national security commitments.

The outcome of this independent review is highly anticipated, with hopes that its recommendations will lead to more effective strategies and legislation to protect the public and bring fraud perpetrators to justice in an era defined by increasingly sophisticated and widespread criminal activity.

Incentivizing whistleblowers

The terms of reference for Part 2 of the Independent Review explicitly state the review will include: “Evaluating incentives for criminal fraud networks informants and whistleblowers.”

The current whistleblowing framework in the UK, governed by the Public Interest Disclosure Act (PIDA), is seen by many as inadequate as it focuses on employment law and lacks strong incentives and enforcement mechanisms for reporting fraud. This has led to many UK whistleblowers resorting to US whistleblowing laws due to their stronger provisions.

There is growing support in the UK. Nick Ephgrave, Director of the Serious Fraud Office (SFO), has publicly advocated for paying whistleblowers. The SFO was quick to acknowledge the review and said on X: “We look forward to engaging with the Review Team to present our case for reform.”

Whistleblowing in the US

Neil Robson, partner at law firm Katten Muchin Rosenman LLP, explained how financial incentives work in the United States: “For a long time, in the US the rules have been such that whistleblowers have been financially incentivised to provide information on wrongdoing. For example, the US Internal Revenue Service (IRS) Whistleblower Office pays monetary awards to eligible individuals whose information is used by the IRS. The award percentage depends on a variety of factors, but generally falls between 15 and 30% of the proceeds collected by the IRS where those proceeds are directly attributable to the whistleblower’s information.

“Equally the US financial regulator, the SEC, has a ‘whistleblower program’ that was established by Congress to incentivize whistleblowers to report specific, timely and credible information about federal securities laws violations. 

“The SEC is authorized by US law to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to an SEC enforcement action in which over $1m in sanctions is ordered. The range for awards is between 10% and 30% of the money collected (it is generally not less than $100,000 and can be considerably more). It is therefore potentially very financially rewarding for whistleblowers to make disclosures and provide information to the US authorities.”

Incentivizing whistleblowing in the UK

While there might have been historical reservations and concerns about potential issues like false reporting or undermining internal compliance, recent evidence and this inclusion in the Review’s scope indicate a significant shift towards incentivizing whistleblowers. Robson agreed and said: “The fraud review announced on April 22, which will include assessing whether the UK should do something similar [to the US], seems like an eminently sensible approach – particularly in light of HM Revenue and Customs launching its own ‘reward scheme’ for informants later this year.

“A whistleblowers’ reward scheme that incentivizes people to act as ‘informants’ and provide useful information to allow UK enforcement agencies to prosecute wrongdoing has to be one area that is a win for society. 

“If one puts this in the context of the Serious Fraud Office’s statistic that over the past decade more than 700 informants have travelled from the UK to the US to provide US authorities with intelligence in order for them to have some financial gain from providing their information, keeping those people at home and providing UK authorities with the information so that the UK can seek enforcement, bring in more money for the UK taxpayer, and better deliver justice for UK victims has to be a good thing.”