Offering incentives to informants will be one measure considered in a review into how fraud can be tackled. Syed Rahman of Rahman Ravelli assesses the idea.
Paying informants and whistleblowers is one measure being considered as the UK looks to tackle fraud.
The Home Office has said that a government-supported review into how to protect consumers will assess the potential value of offering incentives to those providing information in investigations involving agencies such as the Serious Fraud Office (SFO).
Criminal barrister Jonathan Fisher KC is to conduct an independent review of the UK’s fraud offences and the challenges that law enforcement agencies, prosecutors and the courts face in bringing those committing fraud to justice.
This comes after the publication in March of Fisher’s review of disclosure in complex criminal cases. His examination of fraud will look at how modern technology – including AI – is being used by criminal gangs to steal huge amounts every year from consumers.
Fisher said: "With the advances in digital technology, it has become much easier for fraudsters to avoid detection, and indeed prosecution, outright.
“This 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."
Fisher has said that he will consider incentives for whistleblowers as well as other options that can help law enforcement identify and combat fraud; which accounts for 40% of all UK crime.
Consultation
SFO Director Nick Ephgrave has been in favour of paying whistleblowers to help his agency’s investigations. He wants to see a government consultation on the idea, which he believes could lead to more evidence being produced that speeds up his agency’s work. Ephgrave has also argued that the UK’s reluctance to incentivise whistleblowers has seen hundreds of informants travel from the UK to the US to give authorities information.
The SFO has said it welcomed Fisher's review and will present its case for reform.
It added: "Supporting whistleblowers to come forward has the potential to speed up our cases, bring in more money for the taxpayer and deliver justice for victims more effectively.’’
HM Revenue and Customs has said it will start a scheme for rewarding informants later this year in an effort to target corporates, wealthy individuals and those involved in tax-avoidance schemes.
Positive
This is a positive move in the right direction, not least if one looks at the current US administration’s changes to anti-corruption practices. But it would require a similar model as the US Dodd-Frank Act in order to protect those who come forward. It is unrealistic to think that corporate insiders with high salaries would come forward without adequate protections, including financial rewards that could provide financial security should they become unemployable as a consequence of their whistleblowing.
The US model shows how an effective whistleblowing programme can strengthen the fight against financial crime. But policy debates would be required to determine the best way to set this up in the UK, in order to ensure checks and balances are in place and that a whistleblower was paid on the basis of the value of the information they provided
