Fighting Fraud Locally - PDF Free Download

Fighting Fraud Locally Fighting Tenancy Fraud the Threat to Housing Providers John Baker 26 November, London

The scale of the problem - Annual Fraud Indicator 2013 Identified fraud loss for public sector is estimated at 20.6 billion per annum Includes losses to: local government - 2.1 billion central government - 2.6 billion the tax system - 14.1 billion lost to tax fraud and vehicle excise fraud; 1.9 billion to benefit and tax credit fraud.

Public purse losses AFI 2013 Fraud type Housing tenancy fraud Procurement fraud Payroll fraud Council tax fraud Blue Badge Scheme misuse Grant fraud Pension fraud Loss Estimate 845 million 876 million 154 million 133 million 46 million 35 million 7.1 million

Range of threats for landlords Illegal subletting False applications for housing Right to Buy Failing to use property as principal home Wrongful assignment and succession Key-selling

Prevention of Social Housing Fraud Act 2013 Since 15 October 2013, the Act provides tough new powers including the new criminal offence of unlawful subletting: Gives local authorities powers to prosecute Enables courts to order the recovery of any unlawful profit made by tenants Provides that tenants who unlawfully sublet cannot subsequently regain their security of tenure Convicted fraudsters face up to two years in prison or fine of up to 50,000

Recent successes 1. Using Data Analytics Southwark, London s largest social landlord, set a target of recovering 300 properties in 2012/13 and achieved 322. In 2013/14 well on way to achieving target of 500. How? Range of techniques including data matching through NFI, using private sector partners and working closely with UK Border Agency and the police. Amongst the first to use the new prosecution powers 2. Information sharing Stoke-on-Trent City Council has a housing stock of 19,300 and 3,000 plus waiting list. In 2011, council set up project with Housing Services, Legal Services and Corporate Fraud teams to tackle tenancy fraud. To date, recovered 174 homes and 618K in associated benefit fraud

Recent successes (continued) 3. Joint-working Huntingdon District Council in partnership with RSL Luminus Homes, created fraud hub with all 6 local authorities and several more RSLs. Recovered 31 social properties, identified 135k for recovery and resolved some ASBO issues AND Identified fraudulent applications for housing and undertook successful prosecutions using Fraud Act 2006 and Housing Act 1996. 4. Data-matching Ealing Council working with other councils in W London to create Housing Fraud data hub: Track-a-Fraudster. Match data about tenants, housing waiting lists, council tax support and CRA data. Full results to be reported soon.

Right (or wrong) to Buy?

The Letting Agent

The Love Triangle

National Fraud Authority s Strategy Acknowledge Acknowledging and understanding fraud risks Prevent Preventing and detecting more fraud Pursue Being stronger in punishing fraud and recovering losses Assessing and understanding fraud risks Committing support and resource to tackling fraud Maintaining a robust anti-fraud response Making better use of information and technology Enhancing fraud controls and processes Developing a more effective anti-fraud culture Prioritising fraud recovery and the use of civil sanctions Developing capability and capacity to punish fraudsters Collaborating across local authorities and with law enforcement

Operation Amberhill Met Police initiative targeting identity fraud Part of the NFI Data match between tenancy information and false driving licences BBC News

Acknowledge Acknowledging and understanding fraud risks Acknowledge House file checked Assessing and understanding fraud risks Committing support and resource to tackling fraud Maintaining a robust anti-fraud response Housing Application Checked Criminal Investigation followed Recognised as a fraud risk

Prevent - are there any more? Prevent Preventing and detecting more fraud Initial sift based on applications made in 2003/4 Making better use of information and technology Suspicious live tenancies identified Enhancing fraud controls and processes Developing a more effective anti-fraud culture

Prevent - can we stop it happening? Prevent Preventing and detecting more fraud Document training Making better use of information and technology Enhancing fraud controls and processes Fraud awareness training Additional tools (ID checking) Developing a more effective anti-fraud culture

Deterrence Prevent Preventing and detecting more fraud Making better use of information and technology Enhancing fraud controls and processes Developing a more effective anti-fraud culture

This property has been recovered by Southwark Council. The Council undertakes activity to identify and recover properties to help ensure that properties are allocated and used appropriately. If you have a change in circumstances that may affect your tenancy contact 0800 952 4444. If you suspect a fraud, report it on 0800 052 1010

Pursue taking action Pursue Being stronger in punishing fraud and recovering losses Prioritising fraud recovery and the use of civil sanctions Developing capability and capacity to punish fraudsters Forgery and Counterfeiting charges Obtaining pecuniary advantage by deception Property recovered and re-let within three weeks. Joint operation with Met Police and the UKBA Collaborating across local authorities and with law enforcement

Pursue taking action Pursue Being stronger in punishing fraud and recovering losses More joint operations planned Operation Silver Prioritising fraud recovery and the use of civil sanctions Developing capability and capacity to punish fraudsters Collaborating across local authorities and with law enforcement

A reminder what is fraud???

Fraud For an offence to have occurred, the person must have acted dishonestly with the intent of making a gain for themselves or anyone else, or inflicting a loss (or a risk of loss) on another

Fraud Act 2006 Abuse of position Failure to disclose False representation All these offences require the element of dishonesty to be established

The fraud triangle what drives fraud? Pressure Opportunity Rationalisation

Whatever happened to the fraud triangle? Incentive or Pressure 71% Opportunity Attitude/ Rationalisation Malice/technical challenge

Need or Greed?

Angels v. Demons

Angels v. Demons (but where does that leave the rest of us?) You don t have to worry about 10% (but do you know who they are?) You must worry about 10%...you need to police them strongly (but do you know who they are?) So how do you keep the wavering majority honest?

Good v. Bad (Honest v. Dishonest) Persuade/Reward v. Punish? Appeal to better nature v. Don t give them a chance? Compliance v. Enforcement?

The UK National Health Service model (good for the demons ) Create an anti-fraud culture Deter fraud Prevent fraud Detect fraud Investigate fraud Apply appropriate sanctions Redress the situation

Another way? (good for the 80%) Create an ethical, fraud averse culture Facilitate honest behaviour Incentivise Remind Escalate Investigate Sanction Redress the situation

Create an ethical, fraud averse culture Facilitate honest behaviour Use your data to target your efforts and resources What about this could it capture the 90%? (you don t have to worry about the angels ) Deter, Prevent, Detect, Investigate, Sanction and Redress Incentivise, Remind, Escalate, Investigate, Sanction and Redress

Results so far Protecting Public Purse 2013: 51% increase of activity by councils to tackle tenancy fraud, with 2642 properties recovered Provision of targeted list of cases for investigators to examine Cost savings from detecting, disrupting or preventing benefit fraud Increased revenues from recovery and fines Cost saving through allocation of recovered homes to individuals in temporary accommodation Potential reduction in number of individuals on housing waiting list Social benefits of providing homes for families in genuine need

What you can do? Use CIPFA s TISonline site to access FFL resources Consider how you can use the new legislation Join the Tenancy Fraud Forum Talk to neighbouring councils and registered landlords about working together and sharing the costs

Any questions please? john.baker@bakertilly.com