Fraud cops mired in legal differences

A FRAUD UNIT meant to tackle credit card scams has failed to get off the ground because of difficulties establishing working arrangements between the public and private sector.

The Payment Industry and Police Joint Intelligence Unit (PIPJIU) was meant to form last year, when fraud reached record levels, from the merger of police and industry intelligence units.

It was to operate on a similar model to the National Fraud Reporting Centre proposed by the Attorney General's Fraud Review in 2006 as a key method of tackling "chronic" levels of fraud in British banking - scams that for the most part go unreported.

Credit managers in the IT trade regularly complain that the police aren't doing enough to combat credit card fraud. They think the police aren't bothered.

A spokesman for APACS, the credit card industry body that runs the Fraud Intelligence Bureau, one of the units to be merged, confirmed that the PIPJIU was not formed as planned in 2007.

"That's due to happen any time now," he said. "It's just a matter of contracts being signed."

"The legal agreement is not straightforward because the PIPJIU is a public-private partnership," he said.

Pressed further, he speculated that the delay might have something to with a disagreement over how the unit would be funded. He refused to comment further, saying the details were "sensitive".

When the Attorney General proposed an NFRC it foresaw that data protection law would also pose problems for a body that attempted to share intelligence data between the private and public sector. NFRC has also still not been established. But the Attorney General's office has a working group trying to get it off the ground.

KMPG reported this month that fraud had reached levels not seen in the UK for twelve years. Merely the fraud cases that got to court totalled £1 billion.

It expected fraud to get worse in 2008 as "personal and corporate pressures" push more people into a life of crime.

Most of this fraud was scammed out of the public purse. But KPMG doesn't concern itself with payment fraud. That's APACS' business.

Last week, APACS applauded the work of the Dedicated Cheque and Plastic Crime Unit, which houses a fraud intelligence arm staffed by police officers funded by APACS itself. The DCPCU is the other unit meant to be lumped with the Fraud Intelligence Bureau into the PIPJIU.

It had been an "Impressive year for unique police unit" said APACS in a statement. It had made £107 million in fraud savings, it said.

What this actually meant, was that it had seized 16,500 fake credit cards and details of 103,000 real cards which, had they been used fraudulently, might have done about £107 million of damage.

Meanwhile, levels of credit card fraud actually went up in the first half of 2007 by 26 per cent to £263.6m. That outstrips the unit's fraud "savings" by about five-fold. µ