2021ii3, Wednesday: Getting away with it.

Short thought: For anyone involved in dealing with fraud - as an investigator, an insurer, a lawyer or otherwise - the past couple of decades have been frustrating beyond bearing. Those 20 years have seen the resources devoted to investigating and prosecuting private-sector fraud dwindle to near-nothing, while fraud grew to as much as half of reported (if not always recorded) crime (as the online environment both created new attack vectors and exposed a huge population of potential targets) and losses estimated by some in the hundreds of billions.

Some blame banks. And they’re not beyond reproach: the schemes set up to repay victims of authorised push payment or APP fraud (where someone bamboozles you into making a payment to the wrong recipient) have been dogged by reluctance, under-resourcing (again) and a tendency by some institutions to pin the blame on the victim far more than may be entirely justifiable.

But there’s a fundamental tension here, as exposed in the recent case of Philipp v Barclays Bank [2021] EWHC 10 (Comm). A bank’s primary duty is to carry out its customer’s instructions, not to police those instructions on the off-chance there’s a fraudster behind them. There is a duty to act on reasonable suspicion of fraud or dishonesty; it’s called the Quincecare duty. But it’s of limited application, and (as the Court found in Philipp) doesn’t apply where it’s the customer themself, rather than an agent or someone purporting to act for them, who’s delivering the instructions. The public policy trade-off between the mandated duty and fraud protection is a real one, not something which can simply be refashioned on the fly.

So what about the regulators? Most fraud isn’t undertaken by regulated institutions. No doubt regulators such as the FCA could do more to police the perimeter of their powers - and as Dame Elizabeth Gloster has found in relation to the London Capital & Finance fiasco, it has often been shortsighted at best in how it approaches that task. But it’s not a complete answer by any means.

I’m not sure there’s a simple answer. (Which calls to mind HL Mencken’s maxim: for all complex problems, there’s an answer that’s clear, simple and wrong.) But a recent report by RUSI suggests a re-framing of the problem which I like, and which I think puts the emphasis where it belongs.

RUSI sees fraud as a national security issue. It takes the UK’s three national security priorities - protecting our people, projecting our global influence, and promoting our prosperity - and points out that fraud does serious damage to all three. It impoverishes and immiserates the people of the UK. It damages our standing by making us seem to be a paradise for untouchable crooks (including substantial involvement by organised crime) and launderers. And it undermines our prosperity by leaching from the public purse and leaving us with a financial system and economy where transactions can’t be trusted.

Taken together, it posits (I think rightly) that fraud imposes a uniquely damaging disruption not only financially but on society as a while

It suggests what it calls a “whole-of-system” approach, whereby non-criminal justice state actors including intelligence services work together with the criminal justice system to tackle the issue. Unsurprisingly, it calls for significantly enhanced funding - not just for existing specialist forces such as the City of London Police, but nationally. And it makes the case for clearer accountability and leadership.

Of course, you could say we’ve heard this all before. And yes, we have: the 2006 Fraud Review said some of these things, albeit in a different way, and a retrospective 10 years later found little had changed.

But the losses are now staggering. Everyone knows someone - a relative, a friend, a business partner - who’s lost sometimes significant sums to fraud. The pandemic has created huge new opportunities for fraudsters. And if the government is even slightly serious about “levelling up”, or “building back better”,  then keeping billions in honest circulation rather than in fraudsters’ pockets has got to be a good idea. Aside from anything else, the well-known principle of loss aversion indicates that if someone loses cash to fraud, they’re even less likely to spend what they have left. Not a great help to a pandemic-stricken economy.

And that starts, inevitably, with resourcing it in line with the huge harm it does.

Put more simply: if not now, when?

Someone is right on the internet/things worth reading: I’ve been a sucker for a good mystery all my life. As a kid, I thought Poirot and (later) Miss Marple were the best. Lawrence Block’s Burglar books were a later unashamed pleasure. I haven’t quite read all of Rebus, so I’ve gone back to the beginning and started over before reading the latest ones.

But if you backed me into a corner and said I could only have one detective fiction creator, there’s no contest. Dorothy L Sayers was, is and probably ever shall be the one for me, and Peter Wimsey is my sleuth. Five Red Herrings takes the cliche of train timetables and makes a masterpiece from it; Murder Must Advertise gives us a glorious double life; and Busman’s Honeymoon somehow combines mystery and romance into a piece of sterling literature.

But Gaudy Night is special. The point of view changes to Harriet Vane, initially a secondary character (in Strong Poison) but now a co-star in her own right. And - as beautifully explored in the New Yorker (sorry, paywall - but this could be one of your monthly freebies; it’s worth it) - an exemplar of how Sayers laid the groundwork for today’s flowering of superb female mystery authors. The article’s worth a read. And the books? Just go for it.

(I should also mention the supremely well-done BBC Radio adaptations - all available on Audible, with Ian Carmichael as Wimsey and Peter Jones, famous among geeks for being the voice of The Book in H2G2, as Bunter. Not quite up to the Sherlock Holmes standard set by Bert Coules with Clive Merrison as Holmes and Michael Williams as Watson - but really, really close…)