I have always liked the various regional fraud forums (or should it be fora?). They provide a great networking event for me as a forensic accountant specialising in fraud to attend. Since meeting with Northumbria Police ‘s Phil Butler prior to the inaugural North East Fraud Forum event – must be as far back as 2003 – I have been attending these events – including the North West Fraud Forum and the London Fraud Forum. I spoke at the very first one and have given talks at them subsequently. There are other fora around the country, but you can only attend so many networking events!

In my own area, Yorkshire and Humber, I had been attempting to get a local fraud forum galvanised for some time. I remember working with a leading fraud lawyer from DLA Piper to interest some of our public sector colleagues to spark off a similar regional forum. This was back in 2004/2005. My lawyer friend was tasked with getting the Leeds City Council interested and I was to do the same with the local West Yorkshire Police force. Unfortunately neither of us had much success – perhaps we were not very good at lobbying or working the “politics” of the matter. My own response from the then acting DI of the WY Fraud Office was negative – and that I should seek to attend the North East Fraud Forum for any networking I wanted to do!

Thankfully that officer has moved on now and there is indeed a Yorkshire and Humberside regional Fraud Forum in operation – set up by the sterling efforts of others I must say, though I continue to be a strong supporter. It does get a lot of support from the police forces, not just West Yorkshire but North Yorkshire, Humberside and South Yorkshire forces as well as various other leading organisations and bodies.

In fact Paul Welton of Humberside Police Economic Crime Unit called me last week and asked if I would like to speak to BBC Humberside about why I attended the forum and I said that I would be delighted to help. I was to chat to Andy Comfort on his breakfast programme on Monday morning of the 7th of June – the same day as one of the forums events “Tackling Business Fraud” (that I was attending later that day).

So this morning – eight o’clock approaches and I am sitting nervously waiting for my phone call – a list of prepared responses as to why I attended Yorkshire and Humberside Fraud Forum’s events.  Of course once the call comes all preparation goes out of the window – we chat about fraud live on radio for well over 10 minutes and how it is an increasing problem today. It certainly focuses the mind – what are the problems that fraud poses for us today and how do we tackle it? The fraud forums are only a small part of the answer, but they do go a little way to illustrate the importance of the public and private sectors working together – something that all seem to voice but few ever look practically to see how it can work.

The police will tell you that they are under-resourced when it comes to dealing with cases of fraud – it is not surprising as fraud investigations are extremely labour intensive. I understand that there are only something like 400 – 500 full time police officers working in the various fraud squads around the uk. Compare that to a typical fraud, maybe worth around £250,000 in losses to the victim – might take up the full time of at least one if not more police officers – for 6 months, a year or even longer. Then consider that the level of fraud is estimated to cost the UK some £30.2 billion per year (as estimated by the National Fraud Authority and probably a vast underestimate) and you will see why the police alone can only chip at the surface of the fraud problem.

Other agencies investigate fraud of course – we have the Serious Fraud Office – that the new government is considering combining with the Financial Services Authority and Office of Fair Trading’s fraud investigation wings – to form a more powerful Economic Crime Agency.  We have  investigators from the Department For Business Innovation and Skills and from HMRC as well as from other agencies – all investigating fraud.

But what we really do need – and this is exactly in tune with David Cameron’s fight against public sector waste of recent years – is a much closer involvement of the private sector in the fight against fraud generally. I would like to see this achieved by the utilisation of private sector investigation resources and financial fraud specialists – using transparent tendering methods based on obtaining the best quality of services at the most reasonable prices.

Identity theft is a subject that is raised and discussed at many fraud forums and similarly reported in an increasing number of news articles. It is not just the cloning of identities followed by fraudulently obtaining goods or services on credit cards that results from identity thefts. Some very complex frauds are built on false identities and credibility stolen from others.

A report in this week’s Financial Mail in the Mail on Sunday illustrates how such fraud might be working. It involves a potential boiler room fraud which involves the selling of bogus or worthless shares in business ventures by high pressure salesmen. Credibility to their product is provided by details of another real and likely more successful venture whose details can be checked in the public domain.

In this case it appears that an oil company is touting for investment in its two “proven” oilfields. Its web site gives details of a director that are the same as those of another company Petroneft Resources who also has oil fields in Lineyoye and Tungolskye, names that are curiously similar to those quoted for the other bogus oil company. The bogus oil company cannot be contacted and its address details given are false. Petroneft, which is based in Ireland and is clearly a bone fide company, was astounded to find that there is another company that appears to be advertising the same assets as it owns.

Petroneft has reported this instance of credibility hijacking to the Irish Financial Regulator, Financial Services Authority and City of London Police. The FSA say that incidents of identity theft and associated unauthorised sale of investments in typical “boiler room frauds” has increased dramatically over recent months. In the last three months alone it has received 29 such reports.

It does seem that even with the current economic climate that there is plenty of money that investors are seeking to find homes for. This may be a case of moving funds around in an increasingly competitive market or there being more money available for investment. Whatever the case, people with money and those responsible for others’ are still investing in bogus schemes at an alarming rates. Ponzi frauds and other advance fee scams are still being reported and the current flavour it seems is the boiler room threat.

Financially astute persons (i.e. those with money or investing it for others) should not be easily caught by these scams. There is a level of fraud prevention due diliegence that can be carried out that does not involve much effort but will uncover, or at least throw up some red flags, most of the bogus investment opportunities. It is no good relying on company searches in a climate where identities are so easily hijacked. Drilling down into an individual’s or organisation’s identity is essential, to uncover all of the public information available and checking or cross referencing this wherever possible. When investing several £100,000 or millions, surely it is worth checking to see if a director is who he says he is and lives at his stated registered address? For a few pounds this, and many other details, can be so easily verified.

Mark Jenner is a forensic accountant specialising in fraud investigation and fraud prevention.

I thought that an article in the Sunday papers about the Serious Fraud Office this week would be a welcome read. However as I read down the first colmun the old cynicism crept in! The piece was an interview with a senior staff member Phillippa Williamson.

It was not the human angle that annoyed me, but the alarm bells began to ring when I noticed that prior to the SFO she was working for HMRC in charge of tax credits and child benefits. Reading down I was reminded that her current boss, Richard Alderman was also a former colleague at Revenue & Customs.

I have often noticed the various positions being advertsied – head of Asset Recovery Agency, Head of this, deputy for that – and in each case I have considered (for a very brief moment) applying. I have occasionally taken a passing interest in those that get the jobs. The Curriculum Vitae usual gives a history of public sector posts a little like Ms Williamson.

It upsets me a little to think that my industry’s flagship fraud regulator is just like any other politically driven organisation. I do not believe that politics and results go hand in hand very often and the regular accusations of cronyism by the press are well founded it seems.

Fraud is an insidious problem in the UK. Yes, I am just looking at the UK today, but no doubt many other countries will have the same problem. We are getting a Fraud Reporting Center so that we can begin to know really how much fraud costs us every year. We might be merging the SFO with the Financial Services Authority (particularly likely as the Conservatives are advocating this move). There was talk about a merger of the SFO with the Serious and Organized Crime Agency a while back.

There is plenty of talk, it seems that all parties recognize the threat of fraud, in the same way as they know there are too many vehicles on the road and that the railways ought to be developed properly. It is one thing knowing, setting up inquiries, having expensive working parties report the problem. What we need is direct action to stop fraud becoming further entrenched into our way of life. I hesitate offer more quasi political advice but perhaps the country needs its own “fraud policy”? I and others are always preaching to companies that they need one – it would go a long way to deter the fraudster and perhaps remove the need for the self gratifying public relations exercises that the SFO feels that it needs to promote in the form of reported interviews with its old schoolboy (or girl) network of staff!