Fraud is a big threat to modern capitalist society and it perhaps reflects where we are as a society more than most other things.
Fraud is perhaps the most selfish of acts, showing a total disregard for others and the damage that is done to the greater good.
From the biggest financial institutions down to the general population, is it not the case that we have a major fraud issue and has it become so embedded in our society that Governments are unable or unwilling to tackle it ?
This may sound like an overly pessimistic assumption on first consideration but the facts suggest otherwise. We have the very well publicised instances of large scale fraud and reckless greed behaviour in major banking institutions, we have the MP expenses scandal, we have evidence that a significant proportion of society are prepared to lie and embellish the truth when applying for jobs, and we have had the huge and obvious disconnect with fraud whiplash claims, where the number of claims made has gone up exponentially whilst the number of car accidents has fallen.
If indeed we do have a real problem in our society, does it not need to be tackled head on, whether that means criminal sanctions for however many people are prosecuted, even if it’s a lot ? Whilst the fraud in the big institutions and organs of power is very much on the agenda and in the news, there isn’t much of a debate on a societal level, where we are perhaps brushing the issue under the carpet. Doing that will perhaps just move the problem sideways.
An example of the above, many would argue, especially negligence lawyers such as LLoyd Green that the new personal injury rules, which come into law today, are an example of sidestepping the real issue. Insurance companies have had data for some years about the extent of personal injury fraud, especially whiplash, but there have been very few prosecutions based on this. Instead, they have ruthlessly lobbied Government to change the overall system so that in many cases, costs will not be recoverable from them. The result of this is that inevitably a large number of the smaller value injury claims, including whiplash, will no longer be viable to take to court and the incentive to make a claim will be diminished, but by doing this, it doesn’t tackle the underlying issue of fraud and also, as a corollary, will certainly punish the many honest and legitimate claimants who have been injured due to negligence.
It is entirely possible that the fraud issue will simply move somewhere else, as seems to have been the case in the past. Take for example the self certified mortgage issue – many thousands of people were able to get large mortgages based on certifying their own income, and this resulted in large scale fraud where loans were obtained effectively by deception. The practice became so widespread that action to deal with it became unrealistic. Other examples include huge social security fraud problems and immigration related fraud also.
Unless and until society takes fraud seriously and we all recognise that the impact of it will ultimately effect all if us, and unless and until there are real consequences of fraud, we have a problem, and that problem is potentially a threat to the entire economic and moral system.