Private sector needs to be better utilised to tackle fraud, says R3

The proposals - which disrupt fraudulent activities and increase recoveries for victims - are among a number of recommendations made by the insolvency and restructuring trade body to help “the UK’s fight against fraud”. 

It comes as National Crime Agency estimates suggest fraud costs the UK economy around £190bn a year - while research from the Office for National Statistics showed instances of fraud increased by 41% between 2019 and 2021. 

In order to bring this number down, R3 suggests government departments and law enforcement agencies make greater use of the capacity and resources in the private sector. This, it believes, would increase the number of disqualifications and prosecutions that can be made, as well as the number of large and complex cases that could be tackled, and reduce government costs. 

Additionally, it says the restoration of a company to the Companies Register should become an administrative process - in place of the current requirement to obtain a court order - in order to minimise the time and costs involved in restoring a company through the court and to help facilitate more money being returned to creditors and victims. 

Companies House’s powers should also be reformed so businesses that are automatically struck off the Companies Register can be reviewed, enabling those that are insolvent to be placed into an insolvency procedure. This, in turn, will support the recovery of misappropriated company assets for the benefit of the company’s creditors. 

Finally, it’s called for the creation of a joint public-private unit responsible for the recovery of criminal property and that all new pieces of legislation undergo an assessment of fraud risk - including an estimate for the amount that could be lost by government or victims. 

R3 president Christina Fitzgerald said of the proposals: “Fraud has always been a serious issue - one which takes a toll on individuals, businesses and the economy - but case numbers have increased over the last two years at a time when government resources are understandably tight.

“We believe the policy recommendations contained in this paper will allow members of the insolvency and restructuring profession to further support anti-fraud efforts, increase prosecutions and convictions, save the government time and resources, and ensure more money is returned to creditors and victims.

“We urge the new government to consider adopting these as the Economic Crime and Corporate Transparency Bill begins its legislative journey so the UK is best-placed to tackle fraud, prosecute those who commit it and recover the money that has been stolen from people and businesses.”