Insolvency body R3 calls for return of criminal bankruptcy

Frank Brumby, eastern region chairman of R3.

Frank Brumby, eastern region chairman of R3. - Credit: Archant

Criminal bankruptcy should be reintroduced to help return money from fraudsters to their victims, according to a report published by the regional branch of insolvency trade body R3.

R3 eastern region chairman Frank Brumby says criminal bankruptcy orders would be more effective than the current system of confiscation or criminal orders, and would mean that all of an individual’s assets could be realised to repay victims, rather than just the proceeds of crime.

The R3 report claims that the UK’s fight against fraud has been hampered by cuts to the budgets of the Government’s anti-fraud agencies, and suggests that the powers that insolvency practitioners already have to investigate fraud should be used more widely.

“Insolvency practitioners already have significant powers to investigate fraud and find redress for victims, but they can only be used in a limited number of situations,” said Mr Brumby.

“Given Government spending and resource cuts, it’s likely there are a number of fraud cases that government agencies just can’t afford to pursue. Increasing the opportunities for insolvency practitioners to use investigative powers would help bring more fraudsters to justice and ensure victims are properly compensated.

“It could also help iron out existing inconsistencies, such as the fact that companies can be made insolvent in the public interest, but individuals cannot.”