Motion made and question proposed, That this House do now adjourn.—[Kevin Brennan.]

After a lengthy and, dare I say it, extended debate about police force boundaries, I want to focus on the victims of a particular crime—we always say that we want to put victims first. I am grateful for the opportunity to bring to the attention of the House the appalling situation that 19 households in my constituency have experienced as victims of what has become known as internet rogue dialling. I also want to discuss the dismal treatment that those constituents have received as BT customers and highlight the regulatory mess, from which we are now emerging with the help of the Minister for Industry and the Regions, my right hon. Friend Alun Michael, but which still leaves my constituents and thousands more all over the country as out-of-pocket victims who feel that they have been living a nightmare.

Although there have been various problems associated with premium rate service abuse, I am discussing one specific type of scam—for "scam", read "crime". It did not involve the victims making any judgments or misjudgments while using the internet, and it did not involve misleading online advertisements or offers that might have lured people into such a predicament. All my constituents did was open their telephone bill and find charges, usually for hundreds of pounds, for calls that they never made. The largest charge was for more than £800, and those people can prove that they never made those calls.

Ofcom accepts that that is what happened, and it has provided me with a briefing for this debate:

"There exists a type of 'rogue' dialler using premium rate ('09') international and satellite numbering that proved to be a serious virus type problem during 2004 and resulted in substantial levels of consumer harm. This resulted in ICSTIS receiving an unprecedented volume of complaints and enquiries from consumers about this activity. The majority of those cases involved websites simply installing diallers without permission and with stealth, resulting in consumers receiving high bills and subsequently disputing them on the grounds that they had no knowledge these calls were being made."

The rogue calls were usually to an obscure, faraway place, in the case of most of my constituents, the island of Tuvalu, which I confess that I had never heard of until I took up this matter, and a wave of complaints was made to BT, the police and the regulators. The matter was highlighted in East Anglia by BBC "Look East", but other victims have subsequently contacted me from all over the country.

BT has also provided me with a brief, which states:

"at one time some 2,000 cases were being reported daily to ICSTIS; ICSTIS were taking up to 26 weeks to conclude investigations; ICSTIS often did not know who ran the services in order for customers to approach them to their money back as records were not up to date, and some unscrupulous terminating comms providers dragged their feet in complying with requests to update ICSTIS; ICSTIS had no real 'teeth' to make them comply".

It is clear that BT tended to blame the Independent Committee for the Supervision of Standards of Telephone Information Services.

The real problem was that whoever people complained to, BT said, in effect, "It's not me, guv—it's not my fault." One of my constituents, Mr. Gasson, received a bill for more than £600-worth of calls that he never made. He spoke to BT and then contacted the police, who referred him back to BT. Since then, he has been pursued for payment and there have been heaps of correspondence between him, myself and BT. Today, he has been cut off for not paying for something that he never bought.

I congratulate the hon. Gentleman on securing this important debate. The case that he describes is extraordinary. Had it been a credit card, the credit card company would have to refund the money. Why is BT not refunding it?

The hon. Gentleman has taken the words right out of my mouth. The key principle of this case, which applies to all commercial transactions, is that one should not have to pay for what one has never bought. There is indeed a comparison with fraudulent items on credit card bills.

Why should my constituent, Mr. Gasson, and others have to pay BT money that we now know was fraudulently generated? BT, and no other organisation, is the organisation with which he has the commercial relationship as a customer.

I accept that BT is a victim too. It did not wish this to happen and it did not intend to defraud people. However, BT is a giant company that has an overview and understands what has happened. It is much better placed than individual customers to pursue matters along the chain of comms companies involved in the process and to recover the costs in that way. BT is very keen to absolve itself of any blame. It sent me a briefing document that said:

"although the cost of these calls appears on telephone bills, originating communications providers (such as BT) have absolutely no control over the calls in question (although we are obliged to carry them) and receive only a tiny proportion of the revenues involved".

BT has maintained throughout that it will have already paid the money up the chain of operators, arriving eventually at the fraudster, before it becomes aware of the customer's problem, and so then has to recover the money from the customer.

But BT is in business and should know about business risk. It signed up to a system whereby it pays out before it gets paid by customers. If a hit has to be taken, BT, as a business, should take it. It is unfair that the customer is being punished. France Telecom has not punished its customers; it has waived charges for proven fraudulent internet rogue dialler calls. It is disappointing that BT does not have the same sense of duty to its customers. Instead, demands have been issued, lines have been blocked for outgoing calls, and many of my constituents have been disconnected. Even a local charity helpline was cut off for non-payment. It was reconnected after my intervention, but the dispute has still not been settled.

BT has made some ex gratia payments, ranging from almost nothing to £250. I have told BT that its system is inconsistent. It has not demonstrated to me that it has any underlying rationale. The only consistency lies in its unwillingness to waive the offending charges. Ex gratia payments are left to the discretion of individual advisers; that has been admitted to me in letters. This leads me to believe that BT's response is driven more by concern about how its reputation might be perceived than by real concern for its customers.

The heart of the matter is that it is wrong to pursue innocent individuals for charges that we now know were fraudulently generated. To be fair, BT has acted to improve the situation for subsequent and future customers by issuing free premium rate service barring, free software downloads and a more rapid warning system to alert customers whom they suspect are being defrauded.

I too congratulate the hon. Gentleman on securing this important debate. Is there not an interesting contrast between the water companies, which are not allowed to cut off customers who have confusion over their bills, and BT, which is the dominant player in the telecoms market?

I thank the hon. Gentleman for that comment.

BT is also now filing transaction reports with the National Criminal Intelligence Service and withholding payment in cases where it has suspicion.

The Department for Trade and Industry and Ofcom have also acted to tighten up the system. They have encouraged ICSTIS to institute a prior permissions regime for dialler software utilising premium rate numbers, they have introduced the requirement that no money should be paid out to service providers for at least 30 days, and they have increased the fines for offenders. Those actions, when they are all in place, will result in a better system, but the fact that they have had to introduce those measures demonstrates the failings of what was going on last year. However, the new measures do not address the situation of those people who have already become victims of internet rogue dialling, on which I am concentrating tonight.

Because I feel that BT took fraudulently generated money from customers and passed it on through other companies in the communications chain to the very people who perpetrated the fraud, I asked Suffolk police to investigate whether BT was in breach of the Proceeds of Crime Act 2002, and that matter is being pursued by Suffolk police and the Suffolk Crown Prosecution Service. BT knew at that time that the money was dodgy because it was paying its share to a charity. It denies guilt today, and I am not trying to take on BT on that count. It says that it was doing only what it was contractually obliged to do.

But the great feature of the whole matter is that no one will accept blame, fault or responsibility. BT said to me that it

"has a regulatory obligation as a carrier to interconnect with any comms provider in the interests of competition, with extremely limited ability to withhold funds if there is a suspicion of wrong doing"— except that that is what it is now doing, according to the Crown Prosecution Service.

ICSTS seems to blame the companies. It said:

"We did, however, introduce an enhanced registration requirement in June 2004 for service providers operating dialler services. No service provider registered international satellite numbers with ICSTIS and no permission certificate has ever been issued for a dialler licence using an international number."

It concluded therefore that

"any dialler services operating on international numbers is doing so wilfully in an attempt to hide wrongdoing."

On that basis ICSTIS told all leading phone companies back in June 2004 that any international or satellite number found linked to a dialler service should be cut off immediately, and it repeated that message in the second half of 2004. But my constituents were still being defrauded. ICSTIS says:

"The issue of BT's effectiveness or otherwise in spotting international dialler traffic and acting to cut access and withhold outpayment is something for BT to address."

So ICSTIS was tending to pass the matter to the companies. The question is: does ICSTIS and its code have enough teeth?

BT tends to blame Ofcom. It said:

"Ofcom should stop handing out premium rate numbers to companies who have no real business model . . . Service providers could also be required to pay an up-front bond—available to compensate customers if the company defrauded them and disappeared."

Where are we now? Everybody has been playing the blame game, when in fact everybody should be trying to help the victims, not just by preventing future victims, but by addressing the problems of those who are already victims.

First, these matters must be pursued through the criminal justice system. The Suffolk investigation is proceeding very slowly. Will my right hon. Friend therefore write to the Crown Prosecution Service in Suffolk in order to be kept informed and to show some interest in the matter? Of course, that might not produce a result. Secondly, BT should take a leaf out of France Telecom's book and stop pursuing the proceeds of fraud. Of course, BT is not the only company involved. Thirdly, therefore, the Government have a duty to ensure effective and fair regulation, which was not in place in 2004. That was made clear in letters dated 21 March from the chief executive of Ofcom, Stephen Carter, which all Members of the House received.

I believe that the Government have a moral duty to protect people as consumers and as victims of crime. The Office of the Telecommunications Ombudsman only considers whether the processes were followed, but the process itself was flawed. That does not get to the heart of the problem. The Government and the industry, principally BT, should act together to establish a compensation scheme.

My right hon. Friend has nobly acted to improve the future. I believe, however, that we need action to redress the past. Crimes have been perpetrated, innocent victims deserve better from BT, and I think that they deserve a little bit more from the Government.

My hon. Friend raised some important issues in the debate, which, as he was kind enough to acknowledge, I have been addressing, as has the regulator, Ofcom—which, of course, is accountable to the House rather than to Ministers—ICSTIS and others involved, as well as the companies. I felt that this was such an important issue on which to provide enlightenment that I wrote to all Members of the House on 7 November on several of the telecoms issues that were raising concerns, to explain the actions that were being taken by all involved.

Some of the issues raised by my hon. Friend are for commercial organisations to deal with, whereas others are issues that we have already addressed, either directly or through the regulatory bodies, as he was kind enough to acknowledge at the start of his remarks. He was offered an opportunity to clarify his specific concerns, which he has every right not to do, but it is important in responding to the debate to set the proper context.

Let us be clear: when such an event occurs, the blame lies on the author of the scam or crime. Measures that have been put in place, such as withholding money for 30 days to allow recompense or fines to bite, are an important means of protection for the future and of making sure that those who contemplate such activity cannot get away with it.

As my hon. Friend acknowledged, service providers have also been victims. Generosity in dealing with victims is desirable when the service provider is a large company, as he indicated, but it is not enforceable—we cannot require that of a company that is itself a victim, when the problem has arisen because of the ability to use computer equipment that is no part of the provision of BT or any other service provider. We must be even-handed.

Our duty is to make sure that there is effective and fair regulation, and I am pleased by the steps taken to address that. ICSTIS is consulting on changing the way in which its code deals with refunds. Early next year, it should be possible to get refunds from those telecoms companies that terminate premium rate services, which is an important part of the issue.

I would be the first to acknowledge that this is a complicated area of commercial activity in which the fast-changing nature of information and communication technologies, and the pace of convergence between technologies, offer a number of challenges. It should also be acknowledged, however, that it is a success story, in terms of both the services now available and the way in which industry is co-operating with Government to deal with the cowboys. In the case of a number of scams, we have effectively created an antisocial behaviour order for the bad guys without tying the good guys up in red tape. To those who think that internet activity and premium-rate services are wholly bad, I say, "Look at the facts and study the reality." Just banning it all, as a colleague said to me last week, would be so disproportionate as to give the Luddites a good name. I know that that is not what my hon. Friend has asked for.

All that I asked for was some justice for the people who had already been victims. I fully acknowledge the tremendous work that my right hon. Friend has done to try to set the system straight, but if we cannot catch the fraudsters and hold them responsible, what is to be done for the victims of the fraud, who only had a contract with BT or some other provider? Can the Government not do something for those victims?

As I said at the beginning, if my hon. Friend had raised that issue with some clarity I could have said more.

In the cases that my hon. Friend mentioned, BT is the provider of a line. The equipment that is placed on the line and its vulnerability to being used are matters of individual responsibility. They are not the responsibility of BT, which provided the computer whose technology and software were not protected against the possibility of a scam.

As I said, this is a complex area. During 2003 initially but primarily during 2004, there was an explosion of activity involving a scam that had not been anticipated. Many people recognise the need for proper protection for their software and equipment, but do not realise until something goes seriously wrong how important that is, and that it is their responsibility and not that of the provider.

If there is a problem on the road, that has nothing to do with the car that is driven over it. Responsibility for the vehicle and its safety is governed by legislation. It must have passed its MOT, and it must be safe. That is entirely different from the provision of the highway. I think that my hon. Friend has confused and conflated a number of issues.

BT discovered within a day that there was a problem from an analysis of charges that were building up, and notified the person whose equipment was allowing that to happen. It was therefore possible to close it down, and indeed to close the access to overseas numbers. There are numerous such examples.

People have been able to perpetrate a scam and disappear with the money. When that happens, there is no one left to blame, although there are victims. The service provider is a victim, the individuals are victims, but there is no one to blame. We have created a system that will hold money for up to 30 days. I was examining a case with officials and experts today. The fact that the equipment was allowing the criminal—the scammer—to programme it to make the calls was identified within 24 hours. Within 48 hours, the number had been blocked, so the scam could no longer continue. The 30-day delay means that money can be retained within the system and there is a possibility of recompense or, if the equipment has not been properly put in place, of fining. I had hoped to explain some of the wider context: there may not be enough time left, but I shall attempt to do so for my hon. Friend.

We are talking about an industry that is rapidly developing. It provides a variety of services that are used on a daily basis. It is an immensely powerful tool, but my hon. Friend will know that every time one connects to the internet, a warning appears asking whether the user really wants to proceed. The point is to illustrate for users that, along with the power of the system, there are also vulnerabilities.

What has happened as a result of identifying the problems? Rather than coming in quickly with heavy legislation, we have come in quickly to provide the industry with means of enabling future scams to be prevented and to create an increasingly sophisticated system of scam prevention, which allows us to take the value out—

I congratulate my right hon. Friend on all that he has done to rectify the system, but the fact remains that the people who were ripped off in 2004 operated the internet in the customary way. They were akin to people who do not have burglar alarms. If we want to stop burglars, there are burglar alarms, but many people do not own them and we do not say to victims of burglary who do not possess one, "Tough, you didn't have an alarm". Will he now address the situation of the victims, rather than the future?

My hon. Friend misses the point again. We certainly do not blame people who do not possess burglar alarms for the fact that their house has been burgled. We blame the burglar and the criminal. We do not ask the police to recompense residents who have been burgled. One hopes that they will have insurance. If not, we do not then say, "Let the police or someone else recompense them".

I believe that it was right that a variety of providers, including BT, which my hon. Friend specifically mentioned by name, wrote off considerable sums of money that would have gone straight on to the scammer under the previous system. In that context, BT or any other provider such as NTL would have lost money as a result of the scam. The blame falls on the scam. We should do what we have been doing—create conditions that take the value out of a scam so that the scammers cannot take the money and scarper after a short while. They cannot then reappear and repeat the activity. It is important to understand the steps that we have put in place to ensure that that happens.

As regards specific bills, I suggest that my hon. Friend speak to the service provider that dealt with the cases in his constituency. It is not for the Government to say, "You"—whether referring to BT, NTL or whatever—"have been a victim of a scam and you should recompense the customer for everything that they repaid." Such a generous response to the fact that individuals have been placed in a position of loss by large industrial organisations may well be a virtue, but it is not appropriate for the Government to require it. That is what I said to my hon. Friend at the beginning. If he had explained the precise target that he was after, I could have been more helpful, perhaps in advance of tonight's debate, about ways of dealing with the problems of his constituents.

What I want to ensure for the future is that the regulator—in the case of ICSTIS, the delegated regulator, which effectively has authority devolved to it from Ofcom—the Government and the industry can address the issues in such a way as to deal much faster with any scam that appears. We want to be able to seize it, get a grip on it and prevent it from happening. I think that everyone involved would acknowledge that it took some time for people to realise just how costly the scam could be for customers and some time to get up to speed in responding to it. That, however, has now been achieved and I would remind my hon. Friend and the House that—

The motion having been made after Ten o'clock, and the debate having continued for half an hour, Mr. Speaker adjourned the House without Question put, pursuant to the Standing Order

Adjourned accordingly at twenty-five minutes to Eleven o'clock.