Lessons in countering fraud within social housing

08-11-2016

On 1 November 2016, CIPFA welcomed guests to the Housing Fraud Conference, sponsored by Zurich Municipal.

The day was full of ideas, solutions and valuable suggestions about how organisations can combat the threat of fraud within the social housing environment.

Below are some of the key ideas addressed by the speakers and in the lively discussion that followed.

James Prestwich, Head of Policy, National Housing Federation

The world of social housing is under intense pressure. It faces increased demands, demographic change and a lack of adequate funding.

This was the backdrop for James’s presentation. As he explored the issues in more detail - right to buy, income based rents and securing investment - it was clear that although the future was far from certain, everyone had lessons to learn and there was strong evidence of success.

Andy Hyatt, Shared Services Head of Fraud, Tri-borough Partnership

Andy’s detailed session on Right to Buy resonated with all those in the audience; local authority officers who have been dealing with this for over 20 years and housing association staff who are just starting on their journey.

Much of the discussion was around the increasing concerns about money laundering and the need to make changes.

Interestingly, the role of the fraud officer was clearly not just about countering fraud but protecting those in a vulnerable position who were being taken advantage of by fraudsters.

Andy stated: “We are seeing investment companies being set up to take advantage of this situation. They gift the money to buy the property, keep it for 5 years and then sell it at a profit. Often this means that tenants then leave with the money but come back through the door 12 months later as a homeless.”

Tips from Andy’s team included:

  • Challenge how to prove the source of the money.
  • Undertake visits check identify.
  • Train up other staff to be observant and aware of fraud.
  • Use anti-money laundering form.

Stephen Lewis, Mazars

Stephen observed that “fraud develops over a period of time, often starting very small and just escalates”.

This struck a chord with the audience when discussing procurement. His slides showed that if staff thought they wouldn’t get caught then procurement fraud would increase.

His handy tips on the behaviours to look out for resulted in a lively discussion on whistleblowing.

It also reminded delegates that fraud is not just an independent, external activity but can also take the form of collaborative abuse.

Kat Scott, Intelligence Team Leader, Zurich Claims Investigation Unit

Kat presented the most memorable case study of the day, demonstrating how the use of social media such as YouTube is now playing its part in both deterring and identifying fraudsters.

She spoke about how working together with partners has driven highly successful results for Zurich in their fight against insurance fraud. 

Fundamental to this is a zero tolerance approach, including creating legal precedence to combat fraudsters. As she said, “insurance fraud results in increased financial costs, which is why we work hard to minimise this”.

Marcus Hayes, BAE

Marcus shared a compelling video showing the complexity involved in identifying fraudsters who operate across different organisations and across different regions.

He shared some techniques that effectively use data to identify those that had committed fraud.

The audience were asked the question, "Why shoot in the dark when the clever use of targeted information could provide high quality evidence allowing them to prioritize their actions?"

This use of analysis around complex data was also an element of Kat Scott’s presentation. She emphasised the importance of understanding the information available in order to make the strongest case.

Data along with a narrative provides the full story behind the fraud. By bringing together and enhancing data, fraud officers now are in a more powerful position to identify fraudulent activities than they have ever been in the past.

Rachael Tiffen, Head of CIPFA Counter Fraud Centre

Talking about the importance of countering fraud within housing, Rachael said: “When fraud is identified it is essential to communicate the story to the public with the clear and unequivocal message that if you commit fraud you will be caught.”

Good policies, procedures and trained staff all combine to maximize the ability of an organisation to deter fraud. It is also about ensuring that where fraud is identified, a zero tolerance message is communicated clearly to the public.

Stating that fraud is not tolerated and action will be taken is an essential element of any counter fraud culture. She stressed that this strong and consistent message needs to come from leaders as well as the fraud team themselves. 

Conclusion

Thank you to each of the speakers, who were very generous in sharing their practical advice and background knowledge.

Thanks also to the delegates who were passionate about continuing the fight against fraud and shared a strong sense of justice. The desire to protect the vulnerable as well as identify fraud was clearly apparent.

If one clear message emerged from the day, it was that one of the most important elements in the equation is a strong deterrent - the need to prevent people from committing fraud is undoubtedly the best use of resources.

Further information