Number of Serious Fraud Office raids highest in six years

31 July 2018 Consultancy.uk

With fraud in the UK at an alarming high, the Serious Fraud Office spent the past year trebling its efforts to gather information on major scam artists. The 12 months leading to March 2018 saw the SFO complete some 30 raids on suspects, more than the past three years in total.

Fraud in Britain has risen by more than 500% over the last 15 years, while the latest data available has revealed a 6% increase in major scams over the course of 2017, as the total bill breached the £2 billion mark. With this in mind, it is perhaps unsurprising that the Serious Fraud Office has taken more hard-line action to weed out fraudsters over the last year than in the last three years combined, as it bids to stop the rot.

The Serious Fraud Office is a non-ministerial government department of the Government of the United Kingdom department that investigates and prosecutes serious or complex fraud and corruption in England, Wales and Northern Ireland. In the 12 months leading up to March 2018, the Serious Fraud Office (SFO) tripled the number of raids it executed on the last year, hitting its highest frequency in six years. This saw the conducting of a total of 30 raids to gather evidence for criminal investigations, compared to nine leading up to March 2017, and 13 in total between 2014 and 2015. Since March 2017, some of the high-profile probes have included oil giant Petrofac in May, mining company Rio Tinto in July, and British American Tobacco in August last year.

Number of Serious Fraud Office raids highest in six years

The statistics were uncovered by a Freedom of Information request by law firm Greenberg Traurig, before being reported across the UK press. While the data exposed the SFO taking more direct action, however, the figures also revealed that the SFO’s Proceeds from Crime division, responsible for recovering assets from criminal cases, saw its success rate fall dramatically between 2017 and 2018. In total, the watchdog recovered £276,000 from proceeds of crime over the 12 month period in question, just 1% of the £25 million in the previous period.

According to an SFO spokesperson, the figures only tell half the story, however, and a great number of variables are at play for each case investigated. They elaborated that timing of searches is dependent on investigative priorities and “can take a while to come to fruition given the complexity of SFO casework,” while “when considering use of search warrants, we always take into account their necessity or whether other tools may be more effective.”

On top of this, confiscation orders also vary from case to case, meaning the smaller yield by the Proceeds from Crime division may not reflect its efforts. This is because confiscation orders are ultimately determined by a judge, depending on the value of realisable assets of each defendant and amount of money obtained illegally from victims or crime more generally. The SFO spokesperson added that default penalties or prison sentences could be imposed where defendant’s failed to adhere to confiscation orders.

In June 2018, the SFO appointed former FBI lawyer Lisa Osofsky as its new Director. The move was thought by some legal commentators to be aimed at increasing Deferred Prosecution Agreements – a key element of which is to allow corporations to make full reparations – thanks to Osofsky’s prosecution experience.

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ICO stings tax consultancy with £200,000 privacy fine

19 December 2018 Consultancy.uk

A London-based tax return consultancy has reportedly been fined £200,000 for sending out millions of spam texts without consent. The UK’s data protection watchdog stung Tax Returned with the levy following thousands of complaints about the firm’s marketing tactic.

UK accounting and auditing firm Tax Returned specialises in reclaiming overpaid tax for taxpayers. According to the firm’s LinkedIn profile, it has processed more than 90,000 claims and sent out over £4.5 million in tax refunds, with its largest single refund to date standing at £8,198. While this suggests the firm has been doing solid business in recent times, however, a surprisingly desperate recent marketing ploy has landed the firm in hot water.

According to online news site The Register, the London firm sent out a huge 14.8 million spam SMSs between July 2016 and October 2017 in a bid to drum up business. Incredibly, the firm had actually attempted to send out millions more messages, however a number of the 22.7 million it had intended to deliver were not received. That may have been for the best however, as those which were successfully issued sparked 2,100 complaints from recipients.

ICO stings tax consultancy with £200,000 privacy fine

Pending an investigation from the UK’s data protection watchdog, Tax Returned said it had received valid consent to send the messages which were delivered via a third-party service provider. However, the firm was unable to provide evidence for any consent having been given for some, while for others it claimed consent had been gathered via privacy policies on certain websites. As a result, the Information Commissioner's Office (ICO) ruled that the messages were sent without consent, and hit the professional services firm with a £200,000 fine.

Tax Returned argued that it was not involved in the actual sending of the message – and the third-party service provider was therefore to blame – however this fell on deaf ears. This was because the ICO found that the wording of the firm’s existing policies was not clear or precise enough for people to understand they would receive direct marketing messages advertising the firm's services.

According to the watchdog, in most cases, Tax Returned’s policies failed to mention either itself or the third-party service provider by name. At the same time, the ICO scalded Tax Returned for pointing the finger at a third-party provider, neglecting the fact that firms must perform due diligence when drawing up contracts with those they are working with, or be held accountable. The ICO therefore concluded that by failing to do this, or to ensure it had the right to text the people it spammed, the firm broke the Privacy and Electronic Communications Regulation.

Commenting on the case, ICO Director of Investigations Steve Eckersley stated, "Firms using third-party marketing services need to double-check whether they have valid consent from people to send promotional text messages to them. Generic third-party consent is also not enough and companies will be fined if they break the law."