Case studies reveal critical vulnerabilities and lessons learnt that can transform how organisations approach fraud prevention. We asked counter fraud experts to identify the most important cases every public sector leader should study this year.
Shelley Osborne, Fraud Prevention Officer, Counter Fraud Shared Service, London Borough of Lambeth
Two cases stand out for their strategic importance. The first is Audit Scotland's publication on a council tax refund fraud that operated undetected for 17 years - a stark reminder that internal fraud can persist when controls fail.
The second is the recent Heminsley Law Report, documenting a £13.5 million contract overspend. Whilst not strictly fraud, this 53-page report exposes the governance failures that create fraud opportunities: poor contract management, IT system failures, missed red flags, and conflicts of interest.
The key lesson? Map your internal risks systematically. Consider every service area where employees could authorise improper payments to themselves or extract assets. External threats get attention, but insider fraud often proves more devastating.
Alan Gibbons, Senior Counter Fraud Manager, Counter Fraud and Investigation, Government Internal Audit Agency
Sometimes the most effective frauds exploit the simplest weaknesses. We investigated a case where an employee systematically abused travel booking systems, circumventing policy limits to book worldwide travel at organisational expense.
The system was designed to prevent out-of-policy bookings, but inadequate controls allowed exploitation over an extended period. What uncovered the fraud? Basic compliance checks by diligent staff, proving that people remain our greatest asset in fraud prevention.
This case demonstrates how seemingly minor system weaknesses can be exploited significantly, but also how strengthening controls and empowering staff can drive positive organisational change.
Kelly Murphy, Head of Performance, Planning and Workflow, DWP
The Operation Volcanic case (which you may have seen as "benefit fraud gang jailed over £50 million scam" on BBC News last year) represents a watershed moment for public sector fraud response.
This organised crime case highlighted the critical importance of having flexible, adaptive investigative approaches beyond traditional methods. Most significantly, it demonstrated the need for robust front-end controls to prevent fraudulent applications entering the system initially.
For DWP, this case directly informed our five-year strategy to become a "prevent first" organisation. The lessons learnt continue to shape how we build preventive measures rather than relying solely on detection and investigation.
Joshua Reddaway, Director Fraud and Propriety, National Audit Office
Here's a case study that doesn't involve fraud at all, yet reveals fraud's most damaging consequence.
The Home Responsibilities Protection (HRP) scheme saw approximately £1 billion in underpaid state pensions to women who cared for children. Despite extensive advertising campaigns and direct outreach, only 8% of affected individuals claimed their rightful payments. The department now expects £1.1 billion to remain unclaimed.
Why did 92% ignore free money they were legitimately owed? Because they suspected it was a scam.
This illustrates fraud's broader impact beyond direct financial losses. Fraud erodes public trust so fundamentally that citizens become suspicious of genuine government communications offering legitimate benefits.
While we focus intently on verifying that claimants are who they claim to be, we must equally demonstrate that government is genuine in its service delivery. The cost of damaged public trust may ultimately exceed direct fraud losses.
These cases span 17-year internal frauds, simple system exploits, organised crime rings, and damaged public trust. Each reveals different vulnerabilities, but together they show that fraud prevention now requires as much attention to culture and public confidence as it does to controls and detection.