Public/private partnership on fraud – a dangerous precedent or practical necessity ?
Fraud of all kinds is becoming an increasing issue in our society and comes with the double whammy of cuts in police resources. Is it better in these circumstances for cash rich companies to resource the police to achieve a faster more effective solution to serious fraud ? A recent disclosure shows this has already happened but the practice is clearly highly controversial.
It appears that Virgin media paid cash to the police to help resolve a major fraud issue affecting Virgin and the deal, agreed in a formal contract with the Met Police, also had a success element, almost akin to a no win no fee personal injury type arrangement. The facts of this unusual arrangement, in summary, are :-
- It is possible for police to charge private organisation’s fees under the 1996 Police Act, but this usually relates to the costs of policing events such as concerts or football matches
- The problem Virgin had was major international fraud issue which was estimated as losing the company nearly £150 million annually
- Under the commercial arrangement reached, some 30 officers were utilized to work in conjunction with a similar number of internal investigators working for Virgin Media.
- It is understood that police were only brought in when there was sufficient evidence to move to an action phase of investigation
- Controversially the contract provided that Virgin would pay the police 25% of any monies recovered from the fraudsters.
- The arrangement has been heavily criticized. Senior members of the Metropolitan Police Authority state they were completely unaware of the deal agreed.
Clearly, there are compelling reasons why the type of arrangement reached in this case makes a lot of sense, but do the dangers of private companies funding the police outweigh the potential benefits ? What do you think ?