Minutes:
The Shared Anti-Fraud Service (SAFS) Manager gave a training presentation to the Committee, this focused on a recent SAFS investigation which concluded at the end of the last financial year.
The SAFS Manager said that the case related to two planning applications for a property development in an exceptionally rural local area. He said that the first planning application established a development of six mixed use units – to be utilised by each unit occupant for seventy percent residential and thirty percent business use.
The SAFS Manager said that the second planning application was for a change of use for the units - from business to solely residential. This resulted in an East Herts Planning Officer visiting the site for inspection and finding that all of the units were already being used solely for residential purposes, although each were registered for business rates with the Council Tax Department.
The SAFS Manager said that the case was referred to them for further investigation on this basis, and it was found that the property developer had provided false documents in respect of tenancy agreements and business rates forms.
The SAFS Manager said that the case was sent to St Albans Crown Court where £44,000 was recovered. He said that the case had identified areas which could be exploited, and that subsequent mechanisms were in place to stop such reoccurrences. He said that SAFS was now receiving referrals from Planning Teams, and that the successful prosecution sent a direct deterrent message.
The SAFS Senior Investigator continued the training presentation, focusing on the emerging risks and threats from Artificial Intelligence (AI). He said that it was imperative that SAFS got ahead of the curve using local and national intelligence to protect partners.
The SAFS Senior Investigator said that AI was growing rapidly and was here to stay. He said that the emergence of ‘deep fake’ technology meant that fraudsters only need capture three to five seconds of a person’s voice to create a false identity.
The SAFS Senior Investigator said that historically deceptive emails and letters which were sent by fraudsters where easily identifiable with poor English and grammar. He said that AI however allowed for more professional formatting, meaning that red flags were not so visible, and therefore staff diligence imperative.
The SAFS Senior Investigator said that email compromises which encouraged users to use false links had been seen in schools and at one local authority. He said that such compromises allow the fraudster to read and divert a victim’s emails without them knowing, also copying their tone and style.
The SAFS Senior Investigator said that these risks were real, and that increasing awareness of these methods raised the human firewall, ensuring policies and procedures were followed.
The Chair thanked the SAFS officers for their presentation.
Councillor Hart asked how the first defence of the human firewall would work if such fraudulent emails were so realistic.
The SAFS Senior Investigator said that in the first instance staff needed to be thoroughly trained and controls and mitigations needed to follow should this first line of defence fail, for example, the use of secondary authorisation.
Councillor Woollcombe observed that eighty-five of the one hundred and eleven cases within the report concerned Council Tax fraud. He asked if SAFS remit enabled them to deal with larger cases, such as utility company dishonesty.
The SAFS Manager said that their role was predominantly to protect the Council’s interests, inclusive of Council Tax and social housing fraud. He said that unlike the Police, HMRC and the UK Border Agency SAFS were not warranted, although the SAFS financial investigator did possess wider powers.
RESOLVED – that the training presentation be received.