The City of London’s fraud team faces a dressing down from MPs after senior officers conceded that the force recovered only £168m from the suspected £3.7bn proceeds of fraud cases. The MPs on the Commons treasury committee were dismayed with the evidence they heard from officers at Britain’s senior fraud force, as they struggled to explain their efforts to tackle a rising tide of cybercrime.

One told the Financial Times: “You get the sense it’s like PC Plod trying to catch Moriarty.” Another MP said the evidence given this week was “the worst we have ever heard”. During tetchy exchanges, Steve Head, the head of the economic crime directorate, said internet banking was less safe than traditional face-to-face banking and he would like more resources to tackle online fraud.

But his boss, Mike Bowron, City of London police commissioner, admitted that frontline services would “inevitably” be affected if he was asked to implement a 14 per cent cut by 2014-15. MPs on the committee expressed concern that neither Mr Head nor Mr Bowron were readily able to give details of fraud recovery rates, nor about their overall ability to deal with complex financial crimes.

The committee had been expected to wait to deliver its verdict in an official report on financial regulation, expected after Christmas, but Andrew Tyrie, its chairman, made it clear the police could expect a rough ride.

“The level of professionalisation of this crime is growing all the time,” he said. “If we are to have any chance of bearing down on it, we have to improve our act.” The MPs’ verdict is likely to cause concern at the Treasury and Home Office. Mr Head said on Friday he was sorry he had failed to explain his position to the satisfaction of MPs and said: “I’m aware we can do better and we must do better. But we are beginning to win the war.”

The City police are the country’s lead force on fraud, offering support to other forces around the country, and deal with economic crimes ranging from identity theft, illegal share dealing, credit card fraud and large-scale scams.

Mr Bowron told the MPs this week that although recovery rates were relatively low, the police detection rate was 80 per cent. However, the number of cases is rising sharply with nearly 2m people affected by identity fraud every year. Mr Head also clarified his position on the safety of internet banking, insisting that while traditional face-to-face banking was a better guarantee against fraud, he accepted that society had moved on. “If you take precautions, it’s safe,” he said.

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