The intelligence services should play a greater role in tackling fraud to cut the supply of funds to lone wolf terrorists plotting attacks on the UK, according to a new report. A British think tank warned that policing efforts had failed to keep pace with the evolution of terrorist financing from commercial fundraising operations by major groups such as Al Qaeda to low-level fraud by small homegrown operations. The Royal United Services Institute warned in a report published on Tuesday that fraud had reached “epidemic” levels in the UK with an estimated 3.7 million reported incidents in 2019/20 in England and Wales. Up to £48 billion ($65.6bn) is estimated to be lost every year in what amounts to a “heist on public services”, the report said. The sum is bigger than the UK’s annual defence budget but represents only about one per cent of the police response to crime, according to the report. Small scale fraud funds terrorists’ lifestyles and “allows them to act somewhere on the margins of society” while they prepare acts of violence, one of the authors Helena Wood said. Suicide bomber Salman Abedi, who killed 22 people when he blew himself up at a 2017 pop concert in Manchester, north-west England, is said to have lived on student loans and fraudulently obtained housing benefits as he prepared his attack. The paper highlighted the case of the 'Bank of Terror' fraud that saw eight men convicted in 2016 of defrauding UK pensioners out of more than £1m that was allegedly used to pay for British militants to travel to Syria to join ISIS. The conmen posed as police to persuade the victims that their bank accounts were compromised and transfer their funds to another account controlled by the gang. Previous efforts to tackle terrorist financing focused on the major crime operations of groups like Hezbollah, the exploitation of oil resources by ISIS and even cattle-rustling by Boko Haram, the report said. But a 2015 report from an ISIS supporter detailed how militants should target companies like eBay and PayPal, avoid paying taxes and claim benefits for which they are not entitled to target Western interests. The beneficiaries of the police failure to get a grip on the issue include organised crime gangs and terrorists who use scams such as credit card fraud, identity theft, bogus student loans and the sale of counterfeit goods to pay their living expenses while they plot attacks, the report said. “Fraud has now become the crime of choice for terrorists,” said the report called ‘The Silent Threat: The Impact of Fraud on UK National Security’. It cited the case of a Briton who boasted about recruiting more than 200 extremists to attend terrorist camps and was convicted of a fraud connected to the trading site eBay. Hassan Butt’s company took £1.1m of orders for electrical goods but the money disappeared and no goods were delivered. Butt, who was tied to the extremist group Al Muhajiroun, was jailed for 13 years in 2018 for fraud and other crimes. The report called for intelligence services to play a greater role in investigating fraud and for welfare staff to be trained on the methods used by terrorists to help them identify potentially suspicious activities. Mike Haley, chief executive of the fraud prevention body Cifas that commissioned the research, said. “For too long the problem of fraud has not been taken seriously. “There are strong links between fraud and organised crime, and it funds terrorism; yet there is no national strategy to tackle fraud which is undermining our national security.”