IPCA report finds 'major deficiencies' in police response to fraud complaints, lack of victim focus

A report has found "major deficiencies" in the way police respond to fraud complaints, leading to many 'lost victims'.

In a report released on Tuesday, the Independent Police Conduct Authority (IPCA) found police's response to fraud complaints is potentially undermining victims' "trust" and "confidence" in the police and criminal system.

It comes after the Authority received 52 complaints between 2018 and 2020 from members of the public about the police's response to reported fraud.

Fraud and deception are among the most common offence types with eight percent of all Kiwi adults in 2021 - around 318,000 in total - victims of fraud or deception offences.

The Police's Financial Crime Unit estimates New Zealanders lose between $20 and $30 million per year to scams.

Despite fraud and deception offences being so widely experienced, the New Zealand Crime and Victims Survey identified that fraud is significantly less likely to be reported to the police than any other offence.

The report found of the fraud offending that is reported, many are not correctly recorded in the police database as offences, people are being turned away when attempting to report fraud and some reports are being incorrectly coded as civil disputes or public relations matters.

As part of a police review in early 2021, an audit revealed around 20 percent of reports of fraud offences were not appropriately recorded as an offence in the police database. This equates to around 1000 "lost fraud victims" in a three-month period.

"We accept that this may partially be explained by a high volume of vague or 'nuisance' calls made to the 105 number. However, at least some of these reports no doubt involve actual fraud that does not subsequently get recorded because the victim receives an unsatisfactory response from Police on first contact," the report said.

The report exposed a number of fundamental problems which derive from police wrongly viewing fraud, both systemically and culturally, as having low importance and little impact, the IPCA said. 

This has resulted in:

  • variable and inadequate processes for receiving, categorising and prioritising fraud investigations both between and within districts;
  • poor and inconsistent investigation structures and processes;
  • a lack of victim focus; and
  • inadequate expertise and training.

"The Authority has found that the police response to fraud falls well short of victims' expectations and is failing to meet the challenges that the present fraud landscape poses," authority chair Judge Colin Doherty said.   

"Frauds are too often being regarded as civil disputes or minor offences.  They are not receiving the priority they deserve, and the needs of victims are too often not being met."

Police data shows that over the period 2016 to 2020 the number of fraud offences that were recorded increased, while the proportion leading to charges decreased significantly.

"It is clear to us that police need a fundamental overhaul of their processes for recording and investigating fraud," Judge Doherty said. 

The IPCA has made a list of recommendations which include:

  • Monitor and understand the extent of fraud;
  • Implement effective training for front counter and call centre staff who receive, identify and record fraud reports;
  • Establish dedicated regional fraud units, with a national manager, to triage and where appropriate investigate fraud complaints;
  • Implement nationally consistent recording and investigation processes; and
  • Enhance support for victims of fraud.

"Fraud often has a devastating and enduring impact on people's lives. It is time for New Zealand Police to treat this crime type with the seriousness it deserves," Judge Doherty said.   

A police spokesperson said the police acknowledge and welcome the IPCA's findings. 

"Police welcomes the opportunity the report provides to have the conversation on how police, with support from other agencies and the private sector, can reduce the prevalence of fraud in New Zealand and improve the experience of victims of fraud.

"We will consider the recommendations in the IPCA report alongside the findings of the internal review on fraud Police undertook last year to identify opportunities for improvement. The Minister of Police has sought joint advice from Police and the Serious Fraud Office on how the system response to fraud might be improved."

The police said they accept they could do more to meet victims' expectations around the investigation and resolution of fraud, and are also working to improve their visibility and processes around fraud.