Coronavirus and fraud in the UK: from the responsibilisation of the civil society to the deresponsibilisation of the state (original) (raw)

2020, Coventry Law Journal

Abstract

The sudden move of our lives online during the coronavirus pandemic has dramatically increased fraud risks. The personal and economic harms are enormous. The UK Government is responding with a two-fold approach. On the one hand, it relies on traditional law enforcement. On the other hand, it seeks to encourage individuals, businesses and public agencies to take responsibility in controlling and preventing crime by changing their practices through information campaigns and risk assessment and management., a strategy known as 'responsibilisation'. While literature in the last few decades has broadly analysed the social implications of responsibilisation on crime control in general, not many studies have focused on the specific area of financial crime. This study assesses the UK response to Covid19-related fraud risks in light of the literature on responsibilisation through a comparative review of different policies and practices by various government agencies. Our analysis will reveal that the UK Government’s two-fold approach to fraud and financial crime is inherently inadequate to effectively prevent crime. Strained law enforcement agencies and regulators struggle to cope with the high numbers of reported frauds. As a result, both deterrence and retribution are undermined. On the other hand, the fixation on the surgical identification, dissection and rectification of a myriad of micro-situations that can entail a risk of crime causes the government to lose sight of the root causes of crime - biological, psychological, social, cultural, economic and political. After our critical discussion, we will put forwards some recommendations to improve not only Covid19-related anti-fraud policies and practices but, more generally, the response to fraud and financial crime.

Loading...

Loading Preview

Sorry, preview is currently unavailable. You can download the paper by clicking the button above.

References (78)

  1. John Braithwaite 'The new regulatory state and the transformation of criminology' (2000) 40(2) British Journal of Criminology 222-238.
  2. Michel Foucault Discipline and Punish: The Birth of the Prison, (Allen Lane 1977) and Michel Foucault 'The subject and power' (1982) 8(4) Critical Inquiry 777-795.
  3. Garland (n 11) 455-456; Ronen Shamir 'The age of responsibilization: on market-embedded morality' (2008) 37(1) Economy and Society 1-19.
  4. Tim Goddard, 'Post-welfarist risk managers? Risk, Crime Prevention and the Responsibilization of Community-based Organizations' [2012] Theoretical Criminology 1; Pat O'Malley 'Risk, power and crime prevention' (1992) 21(3) Economy and Society 251-268; Pat O'Malley Crime and Risk (Sage 2010). 28 cf Garland (n 11) 459-461.
  5. Fouladvand (n 12) 71.
  6. Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
  7. Pasculli 'The Global Causes of Cybercrime' (n 17) 51-52.
  8. David Cantor and Kennet C. Land 'Unemployment and Crime Rates in the Post-World War II United States: A Theoretical and Empirical Analysis' (1985) 50 American Sociological Review 317-332.
  9. Lawrence E. Cohen and Marcus Felson 'Social Change and Crime Rate Trends: A Routine Activity Approach' (1979) 44 American Sociological Review 588-608.
  10. Donald R. Cressey Other People's Money (Wadsworth 1953).
  11. Graham Sykes and David Matza 'Techniques of neutralization: A theory of delinquency' (1957) 22(6) American Sociological Review 664-670.
  12. Pasculli 'The Global Causes of Cybercrime' (n 17).
  13. Blake E. Ashforth and Vikas Anand 'The Normalization of Corruption in Organizations' (2003) 25 Research on Organizational Behaviour 1 and Vikas Anand, Blake E. Ashforth and Mahendra Joshi 'Business as Usual: The Acceptance and Perpetuation of Corruption' (2004) 18(2) Academy of Management Executive 39. 45 ibid. and Lorenzo Pasculli and Nicholas Ryder 'Corruption and globalization. Towards an interdisciplinary scientific understanding of corruption as a global crime' in Lorenzo Pasculli and Nicholas Ryder (eds) Corruption in the Global Era: Causes, Sources and Forms of Manifestation (Routledge 2019).
  14. Émile Durkheim Suicide: A Study in Sociology (trs A. Spaulding and George A. Simpson, Routledge 1897, 2002).
  15. Joseph Stiglitz, The Price of Inequality (Norton 2012).
  16. Robert K. Merton 'Social Structure and Anomie' (1938) 3(5) American Sociological Review672-682;
  17. Robert K. Merton Social Theory and Social Structure (Free Press 1968).
  18. Nikos Passas 'Anomie and Corporate Deviance' (1990) 14 Contemporary Crises 157-178; Nikos Passas 'Global Anomie, Dysnomie, and Economic Crime: Hidden Consequences of Neoliberalism and Globalization in Russia and around the World' (2000) 27(2) Social Justice 16-44. See also Robert Agnew 'Foundation for a General Strain Theory of Delinquency' (1990) 30 Criminology 47-87; Robert Agnew 'The Nature and Determinants of Strain: Another Look at Durkheim and Merton' in Nikos Passas and Robert Agnew (eds) The Future of Anomie Theory (Northeastern University 1997) 27-51; Robert Agnew Why Do Criminals Offend? A General Theory of Crime and Delinquency (Roxbury 2005).
  19. Steven F. Messner and Richard Rosenfeld 'Markets, Morality, and an Institutional-Anomie Theory of Crime' in Nikos Passas and Robert Agnew (eds) The Future of Anomie Theory (Northeastern University Press 1997) 207-227 and Steven F. Messner and Richard Rosenfeld Crime and The American Dream (5th edn, Wadsworth 2013).
  20. Pasculli (n 17) 55.
  21. Adrian Raine The Anatomy of Violence. The Biological Roots of Crime (Penguin 2013) 175-180.
  22. cf Eugene Soltes Why They Do It. Inside the Mind of the White-Collar Criminal (Public Affairs 2016) 18-19 and David Eagleman Incognito. The Secret Lives of the Brain (Canongate 2011) 112 and David Eagleman The Brain. The Story of You (Canongate 2015) 118-143.
  23. Eagleman Incognito (n 53) 180-186.
  24. Pasculli (n 17) 62-65.
  25. cf Garland (n 11) 463 and Elke Krahmann 'Security: Collective Good or Commodity?' (2008) 14(3) European Journal of International Relations 379-404.
  26. Shamir (n 26) 2, citing Orly Lobel 'The renew deal: The fall of regulation and the rise of governance in contemporary legal thought' (2004) 89 Minnesota Law Review 342.
  27. Elke Krahmann 'Beck and Beyond: Selling Security in the World Risk Society' (2011) 37(1) Review of International Studies 349-372.
  28. From 17 July 2020, the government is no longer publishing the tracker list as most courts and tribunals buildings are now open in line with public health advice. The numbers in this paper are based on the government's court and tribunal tracker list as published at < https://www.gov.uk/guidance/courts-and- tribunals-tracker-list-during-coronavirus-outbreak#changes-to-status-23-june-2020 > accessed 23 June 2020. 62 National Police Chiefs' Council (NPCC) 'Interim CPS Charging Protocol -Covid-19 crisis response' (cps.gov.uk 2020) < https://www.cps.gov.uk/sites/default/files/documents/legal\_guidance/Interim-CPS- Charging-Protocol-Covid-19-crisis-response.pdf > accessed 2 December 2020.
  29. Serious Fraud Office (SFO) 'Covid-19 update' (sfo.gov.uk 7 May 2020) < https://www.sfo.gov.uk/2020/05/07/covid-19-update/ > accessed 2 December 2020.
  30. Cf. Cabinet Office 'Guidance. Fraud control in emergency management' (gov.uk 26 March 2020) < https://www.gov.uk/government/publications/fraud-control-in-emergency-management-covid-19-uk- government-guide > accessed 2 December 2020.
  31. Home Office 'Coronavirus (COVID-19): Advice on how to protect yourself and your business from fraud and cyber-crime' (gov.uk 27 April 2020) < https://www.gov.uk/government/publications/coronavirus-covid-19- fraud-and-cyber-crime/coronavirus-covid-19-advice-on-how-to-protect-yourself-and-your-business-from-fraud- and-cyber-crime > accessed 2 December 2020; HM Revenue & Customs 'Check a list of genuine HMRC contacts' (gov.uk 2020) < https://www.gov.uk/guidance/check-a-list-of-genuine-hmrc-contacts > accessed 2 December 2020.
  32. Home Office (n 65);
  33. The Insolvency Service 'Be vigilant against coronavirus scams' (gov.uk 26 March 2020)
  34. The Charity Commission 'Coronavirus (COVID-19): increased risk of fraud and cybercrime against charities' (gov.uk 12 May 2020) < https://www.gov.uk/government/news/coronavirus-covid-19-increased-risk-of-fraud- and-cybercrime-against-charities > accessed 2 December 2020.
  35. Cabinet Office (n 64).
  36. CPS 'Beware fraud and scams during COVID-19 pandemic' (cps.gov.uk 25 March 2020) < https://www.cps.gov.uk/cps/news/beware-fraud-and-scams-during-covid-19-pandemic > accessed 2 December 2020; NCA (n 8).
  37. FCA 'Avoid coronavirus scams' (fca.org.uk 1 May 2015) < https://www.fca.org.uk/news/news-stories/avoid- coronavirus-scams > accessed 2 December 2020.
  38. NHS Counter Fraud Authority 'Protecting the NHS from fraud during COVID-19' (cfa.nhs.uk 2020) < https://cfa.nhs.uk/fraud-prevention/COVID-19-guidance/ > accessed 2 December 2020.
  39. NTS 'Beware of COVID-19 scams' (nationaltradingstandards.uk, 24 March 2020) < https://www.nationaltradingstandards.uk/news/beware-of-covid19-scams/
  40. NCSC 'Coronavirus (Covid-19): NCSC Guidance' (ncsc.gov.uk 2020) < https://www.ncsc.gov.uk/ > accessed 2 December 2020.
  41. The Pensions Regulator 'Avoid pension scams' (thepensionregulator.gov.uk 2020) < https://www.thepensionsregulator.gov.uk/en/pension-scams > accessed 2 December 2020.
  42. Action Fraud 'Covid-19 related scams -News and resources' (actionfraud.police.uk 26 March 2020) https://www.actionfraud.police.uk/covid19 > accessed 2 December 2020 (the page has now been archived).
  43. Take Five 'Covid-19 fraud and scams' (takefive-stopfraud.org.uk 2020) < https://takefive- stopfraud.org.uk/coronavirus-fraud-and-scams/ > accessed 2 December 2020.
  44. Action Fraud 'Reporting fraud and cyber-crime' (actionfraud.police.uk 2020) < https://www.actionfraud.police.uk/reporting-fraud-and-cyber-crime > accessed 4 December 2020.
  45. FCA 'Contact us' (fca.org.uk 25 April 2016) < https://www.fca.org.uk/contact > accessed 4 December 2020.
  46. FCA 'Report a scam to us' (FCA, 1 October 2020) https://www.fca.org.uk/consumers/report-scam-us > accessed 4 December 2020.
  47. SFO 'Reporting serious fraud, bribery and corruption' (sfo.gov.uk 2020) < https://www.sfo.gov.uk/contact- us/reporting-serious-fraud-bribery-corruption/ > accessed 4 December 2020.
  48. HMRC 'Report fraud to HMRC' (gov.uk 2020) < https://www.gov.uk/government/organisations/hm-revenue- customs/contact/report-fraud-to-hmrc > accessed 4 December 2020.
  49. Department for Business, Energy & Industrial Strategy 'Whistleblowing: list of prescribed people and bodies' (gov.uk 13 February 2020) < https://www.gov.uk/government/publications/blowing-the-whistle-list-of- prescribed-people-and-bodies--2/whistleblowing-list-of-prescribed-people-and-bodies > accessed 4 December 2020.
  50. Pete Duncan and Nicholas Lord 'Furlough, fraud and the Coronavirus Job Retention Scheme' (Policy@Manchester Blogs, 22 June 2020) < http://blog.policy.manchester.ac.uk/posts/2020/06/furlough-fraud- and-the-coronavirus-job-retention-scheme/ > accessed 4 December 2020.
  51. HMRC 'HMRC Fraud Hotline' (n 5).
  52. Sarah Butler 'Nearly 800 reports of people defrauding UK furlough scheme' The Guardian (London, 13 May 2020) < https://www.theguardian.com/politics/2020/may/13/nearly-800-reports-of-people-defrauding-uk- furlough-scheme > accessed 4 December 2020.
  53. Jessica Beard 'Employers given 30 days to "confess" to abusing furlough bailout scheme' The Telegraph (12 June 2020) < https://www.telegraph.co.uk/money/consumer-affairs/employers-given-30-days-confess-abusing- furlough-bailout-scheme/ > accessed 4 December 2020.
  54. Hilary Osborne and Julia Kollewe '140,000 UK companies apply for coronavirus job furlough scheme' The Guardian (London, 20 April 2020) < https://www.theguardian.com/money/2020/apr/20/fears-of-flood-as-uks- covid-19-furlough-scheme-opens > accessed 4 December 2020.
  55. Financial Times 'HMRC suspends some tax investigations due to pandemic' Financial Times (15 April 2020)
  56. Duncan and Lord (n 89).
  57. Butler (n 91).
  58. FCA (n 70).
  59. Hans-Jörg Albrecht et al (eds), Criminal Preventive Risk Assessment in the Law-Making Procedure (Max Planck Institute for Foreign and International Criminal Law 2002) and Ernesto U. Savona et al, 'Proofing EU Legislation against Crime' (2006) 12(3-4) European Journal on Criminal Policy and Research (double thematic issue).
  60. Lorenzo Pasculli 'Foreign Investments, the Rule of Corrupted Law and Transnational Systemic Corruption in Uganda's Mineral Sector' in Rafael Leal-Arcas (ed) International Trade, Investment and the Rule of Law (Eliva Press 2020) 84-110.
  61. cf Russell Morgan and Ronald V. Clarke, 'Legislation and unintended consequences for crime' (2006) 12(3-
  62. European Journal on Criminal Policy and Research 189-211.
  63. Ernesto U. Savona et al (n 114);
  64. Ernesto U. Savona et al A Study on Crime Proofing. Evaluation of the Crime Risk Implications of the European Commission's Proposals Covering a Range of Policy Areas (Università degli Studi di Trento, Università Cattolica del Sacro Cuore, Transcrime 2006) < http://www.transcrime.it/wp- content/uploads/2013/11/Final_Report-A_study_on_Crime_Proofing.pdf > accessed 4 December 2020;
  65. Francesco Calderoni, Ernesto U. Savona and Serena Solmi Crime Proofing the Policy Options for the Revision of the Tobacco Products Directive (Transcrime, Università degli Studi di Trento 2012);
  66. Stefano Caneppele, Ernesto U. Savona and Alberto Aziani Crime Proofing of the New Tobacco Products Directive (Transcrime, Università degli Studi di Trento 2013)
  67. Alexander Kotchegura 'Preventing Corruption Risk in Legislation: Evidence from Russia, Moldova, and Kazakhstan' (2018) 41(5-6) International Journal of Public Administration 377; Tilman Hoppe Anti-Corruption Assessment of the Laws ("Corruption Proofing"). Comparative Study and Methodology (Regional Cooperation Council 2014).
  68. Pasculli (n 115) and Lorenzo Pasculli 'Corruptio Legis: Law as a Cause of Systemic Corruption. Comparative Perspectives and Remedies also for the Post-Brexit Commonwealth' (2017) Proceedings of 6th Annual International Conference on Law, Regulations and Public Policy (LRPP 2017), 5-6 June 2017, Singapore (Global Science and Technology Forum 2017) 189.
  69. Cabinet Office 'Fraud control in emergency management: COVID-19 UK Government guide' (gov.uk 26 March 2020) < https://www.gov.uk/government/publications/fraud-control-in-emergency-management-covid- 19-uk-government-guide > accessed 4 December 2020.
  70. MIAA Anti-Fraud Service 'Anti-fraud client briefing 2' (MIAA 2020) < https://www.miaa.nhs.uk/media/Briefings/Corona/Fraud%20Briefing%20Note%202.pdf > accessed 4 December 2020; Government Counter Fraud Function 'COVID-19 Counter Fraud Response Team' (cfa.nhs.uk 2020) < https://cfa.nhs.uk/resources/downloads/fraud-awareness/covid-19/COVID- 19_Fraud_Response_Team.pdf > accessed 4 December 2020. 122 Government Counter Fraud Function 'COVID-19 Mandate Fraud' (bvrla.co.uk 2020) < https://www.bvrla.co.uk/uploads/assets/9e0d92a8-c292-41af-9f4e50ab71c2a95e/COVID19-Mandate-Fraud- Guidance.pdf > 123 Government Counter Fraud Function (n 121).
  71. Government Counter Fraud Function 'COVID-19 Counter Fraud Response Team NEWSLETTER Issue #1 / April 2020' (cfa.nhs.uk 2020) < https://cfa.nhs.uk/resources/downloads/fraud-awareness/covid-19/COVID- 19_Fraud_Team_Newsletter_April_2020.pdf > accessed 4 December 2020. 125 Government Counter Fraud Function 'COVID-19 Financial Support Schemes Counter Fraud Measures Toolkit' (miaa.nhs.uk 2020) < https://www.miaa.nhs.uk/media/Briefings/Corona/COVID- 19%20Financial%20Support%20Schemes.pdf > accessed 4 December 2020.
  72. FTAdviser 'FCA warns on coronavirus scams' (FTAdviser 27 March 2020) < https://www.ftadviser.com/regulation/2020/03/27/fca-warns-on-coronavirus-scams/ > accessed 4 December 2020.
  73. FTAdviser 'Self-employed targeted with new tax scam' (FTAdviser 10 June 2020) < https://www.ftadviser.com/companies/2020/06/10/self-employed-targeted-by-new-tax-scam/ > accessed 4 December 2020.
  74. Pasculli 'Corruptio legis' (n 119).
  75. The National Counterintelligence and Security Centre 'Five Eyes Intelligence Oversight and Review Council (FIORC)' (dni.gov 2020) < https://www.dni.gov/index.php/ncsc-how-we-work/217-about/organization/icig- pages/2660-icig- fiorc#:~:text=Five%20Eyes%20Intelligence%20Oversight%20and%20Review%20Council%20(FIORC),Kingd om%2C%20and%20the%20United%20States. > accessed 4 December 2020.
  76. Cabinet Office 'International Public Sector Fraud Forum guidance' (gov.uk 10 February 2020) < https://www.gov.uk/government/publications/international-public-sector-fraud-forum-guidance > accessed 4 December 2020.
  77. International Public Sector Fraud Forum 'Fraud in Emergency Management and Recovery Principles for Effective Fraud Control' (gov.uk February 2020) < https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment\_data/file/864310/Fraud _in_Emergency_Management_and_Recovery_10Feb.pdf > accessed 4 December 2020.
  78. David Garland 'The Limits of the Sovereign State' and The Culture of Control (n 11).