NCA Report Highlights Increasing Threat From Organised Crime

Over 4,600 serious organised crime agencies cost the UK economy £37 billion per year; this is a 54% rise compared with the £24 billion worth of losses found during the last report five years ago.

In particular, the National Strategic Assessment of Serious and Organised Crime 2018 report carried out by the National Crime Agency (NCA), has found that money laundering is a huge concern for the UK authorities, with an increased and serious threat caused by criminal exploitation of accounting and legal professionals involved with trust and company provisions.

UK cyber crime continued to rise in scale and complexity since the last report that was completed in 2013. Under-reporting of data breaches continues to hinder the ability of law enforcement to make robust assessments of the scale and cost of network intrusions.

Additionally, the report has found that large-scale data breaches continue to be a persistent problem with information being sold for cryptocurrency, making it difficult to trace.

Business email attacks used to conduct mandate fraud, CEO fraud and conveyancing fraud are increasingly one of the major reported fraud threats facing UK businesses. The report claims that the main avenues to successful fraud include using phishing emails as a means to compromise customers’ security and personal details and gain access to email accounts.

Worryingly, when fraud involves multiple victims there is highly likely to be a network behind the crime.

Lynne Owens, NCA Director General, said: “The National Crime Agency leads the response to serious and organised crime in the UK, protecting the public and targeting the criminals who have the biggest impact. We work closely with colleagues across law enforcement, and elsewhere, to do so.

“This year’s assessment shows that organised crime groups (OCGs) are exploiting digital technology, for instance using encryption to communicate, and dark web market places to aid their activities.

“Criminals are continuing to develop international connections to increase the reach of their activity, and to maximise profits.

“The increasing sophistication of crime groups, coupled with the changing nature of their geographical reach, demonstrates more than ever the requirement for an increasingly co-ordinated response.

“Working alongside our law enforcement, intelligence and other partners, we are changing the way we operate to ensure the biggest possible impact. We will use this intelligence assessment to build on our operational successes and evidence why further investment in capabilities and capacity is necessary.”

Martin Cheeks, Managing Director of Anti-money laundering firm SmartSearch, commented: “The only way these criminals are able to do what they are doing is by using dirty money, and it is therefore our duty to stop them if we can.

“These criminals are highly sophisticated, and the money laundering techniques that they employ are becoming cleverer and cleverer, wrapped up in so many different layers of activity that many have become almost impossible to detect.

“Fraudulent documents, such as passports and driving licences used to launder money and make fraudulent transactions are now so sophisticated, that manual checks are struggling to spot the fakes, which means there are billions of pounds worth of transactions going through the UK financial system every year, funded with dirty money from serious and organised crime.

“When carrying out AML checks, the Fifth revision of the Money-Laundering Directive says electronic identification should be used ‘where possible’ because electronic identification is the most reliable, secure and efficient source of information for identity solutions. If all checks were done electronically, it would remove the risk of errors as a result of manual checks.

“We hope that the NCAs plans to tackle this threat include making electronic AML check mandatory, because it is the only way we are going to spot the money trails which are funding these crimes.”

With cyber related fraud on the rise and becoming increasingly sophisticated, it is important that firms and individuals take the time to improve the 20% of fraud that is currently reported to the police.

Find the full NCA report here.

Is enough being done to combat fraud prevention?  Has your law firm been targeted by cyber criminals?

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