[Miss Anne Begg in the Chair] — Card Cloning

– in Westminster Hall at 12:00 am on 19 February 2008.

Alert me about debates like this

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Blizzard.]

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions) 9:30, 19 February 2008

May I say what a pleasure it is to serve under you this morning, Miss Begg? I had the pleasure of working alongside you in the Work and Pensions Committee in the last Parliament.

I am very grateful to Mr. Speaker for granting me this debate. This important subject does not get the attention that it deserves, and it is extremely distressing and upsetting to our constituents. I speak this morning directly at the request of a number of my constituents who have urged me to bring the issue of thefts from the cloning of debit and credit cards to the attention of the House, the police and the banks and credit card companies—or financial institutions as they are known. I have endeavoured to do that over the past few weeks.

I am particularly grateful to Bedfordshire police for the specific briefing that they have given me on the matter, and I look to the Minister to assure us this morning that the Home Office will hold an urgent and serious review of the current procedures. The procedures are clearly failing and I will try to set out why.

In brief, at the end of November or in early December, a skimming machine was inserted in the credit and debit card machine at a garage in the south of my constituency. Bedfordshire police tell me that, to date, 745 debit and credit cards have had money stolen from them, often on multiple occasions. One credit card may have had five, six, 10 or 12 amounts of money stolen from it. We are not talking about small amounts of money either. Typically, sums of £1,000, £2,000 and £5,000 are taken. I declare a personal interest. My wife had £1,000 stolen in four or five withdrawals from cash points in New York in early January. It was lucky that she checked her bank statement pretty soon after that and realised that something was wrong.

I shall quote briefly from letters from some of my constituents, who are unhappy with the current system for dealing with this serious crime. On many occasions, I have told Bedfordshire police that if 745 purses and wallets had been stolen, mainly in the two villages of Studham and Kensworth, there would probably have been police officers behind almost every hedge trying to catch the culprits. Card crime is no less serious. We are talking about a lot more money than most people have in their purse or wallet. The fact that the money is almost always reimbursed by the financial institutions does not make the theft any less traumatic, difficult and upsetting for the person, or any less of a crime. I object to the fact that the people who have money stolen from them in that way are not described as victims in the legislation.

Financial institutions are described as the victims because they have to reimburse the money, but if someone steals my wallet, I am a victim even if I get the money back later. I do not like that terminology. One police officer said to me, "We don't report gun crime to the small arms manufacturers. We don't report alcohol-fuelled violence to the drinks manufacturers." Yet, in the current system, card crime is reported to the financial institutions. I am not calling for that law to be scrapped because I understand the reasons for it. However, there are serious flaws in the procedure.

My constituents have written to me to say that they are outraged about what is going on. One stated:

"No law-abiding citizen can witness the large-scale theft of money from the UK without indignation."

A woman from Luton had her card skimmed from another garage close to my constituency. She wrote to me:

"They cleared our account down to £5. We have two kids to feed as well. We were worried about how we would survive for three weeks until my husband got paid again."

In many cases, banks and credit card companies try to reimburse people as quickly as possible, but that does not always happen. Imagine the person who is abroad and reliant on their credit card. Suddenly, because of illegal withdrawals, they go over their credit card limit and their card issuer will not let them take out any more money. They could be completely stuck. What about small businesses which have their accounts frozen and are not able to pay their suppliers? The ramifications of this crime are absolutely huge.

It is interesting to look at the range of countries from which money is being withdrawn. Britain has chip and pin—all credit to UK financial services, we are the most chip and pin compliant country in Europe and possibly the whole world. We are even better than Luxembourg, which is the next best in Europe. However, that does not mean that as UK citizens we are any safer. Highly organised criminal gangs clone the details from the magnetic strips on the back of our credit and debit cards and take our pin numbers through the skimming machines, and money is then withdrawn all over the world. From talking to my constituents and the police, I have found out that money is being withdrawn from the following countries: Malaysia, America, India, Hong Kong, Philippines, Dubai, Australia, Canada, Sri Lanka, Singapore, Germany and Thailand. There was an attempt in Ghana, but it was not successful. Let us pause for a moment and consider the scale of that highly organised, sophisticated criminal operation.

Furthermore, there is the question of the use to which the money is put. I have no evidence, but it has been suggested to me that some of the money may have found its way to the Tamil Tigers in Sri Lanka, to Pakistan and possibly to funding terrorism. It is, therefore, a very serious issue. I am talking about not just theft from our constituents but also the use to which the money is put.

The Fraud Act 2006 is in general a good Act. Much of it is sensible and is welcomed by the police. It simplified things and I am not calling for its repeal, but since 1 April 2007, if someone finds that thousands of pounds have been stolen from their bank account or from their credit card, they can no longer go to the police unless the card has been stolen. In most cases, however, the card has not been stolen; the details have been skimmed and the card has been cloned. One must go to one's financial institution—bank or credit card company—and it will be up to them to inform the dedicated cheque and plastic crime unit, which will then liaise with local police forces. However, Bedfordshire police tell me that of the 745 debit and credit cards that were cloned, they did not have one single referral back from a bank or a credit card company.

That is where the current system is completely failing. The most serious issue is this: had just one bank been even semi-switched on, perhaps action would have been taken after five or 10 cards had been cloned. Everyone knew locally that one particular garage was involved. Do not ask me how they knew, but everyone said, "It's that garage that is doing it." If Bedfordshire police had been alerted, they could have gone in within days. If they had raided the garage immediately, they probably would have seized the skimming machine. They might have mounted a covert operation if they had seen that the skimming machine was there, because such machines need to be in place only for three or four days to capture thousands of details. Then they could have caught the criminals coming back to remove the machine, perhaps to take it to another garage. The police would have had fantastic intelligence and would have been able to question the criminals involved.

I understand from Bedfordshire police that typically a lone employee is in a garage, perhaps late at night. The criminal gang arrives and threatens violence, offers bribes or perhaps both. The criminals say, "We'll beat you up. We'll do in your family unless you turn a blind eye. We're going to put something into the card reader. You keep quiet or you'll be in trouble." The machine is there for only a few days and then they remove it. That is how the crime happens.

The current system is failing. The public are not being protected. Bedfordshire police raided the garage to which I have referred, partly because my constituents were not content just to tell their banks and credit card companies; they got on to the police. Prompted by my constituents, I got on to the police as well, but when they eventually raided the garage, two or three weeks ago, it was a classic case of locking the stable door after the horse had bolted. The key point that I want the Minister to do something about is ensuring that information is passed on to local police forces as soon as a pattern emerges, so that the public can be protected. If action had been taken earlier, many hundreds of my constituents and, indeed, other people passing up and down the A5 could have been protected. It is the first duty of Government to protect their citizens from crime, and that is crime by any standard.

It is often said that such activity is victimless crime because people are, by and large, compensated by banks and credit card companies. I refute that suggestion entirely because, as the British Bankers Association said,

"ultimately the financial burden is carried by the general public as a whole in the form of direct personal financial losses, increased charges and premiums, failed businesses, devalued investments, increased taxation, reduced public services and lost jobs."

That is clearly the case. At the very least, the Government are losing out on the corporation tax they could be receiving from the banks, because it is a legitimate expense when they repay customers from bank profits. Banks will recoup that money in the form of higher charges or higher interest rates, just as shops have to do from shoplifting and insurance companies have to do from illegal activities. We all lose out, including the Government, from this crime.

Since the introduction of the Fraud Act 2006, particularly the provisions that took effect from 1 April 2007, people have commented that because the police are not directly informed, card cloning will become a forgotten crime. Derek French, a banking campaigner, has certainly said that. Ross Anderson, the professor of security engineering at Cambridge university's computer laboratory, is also unhappy about the procedures now that

"banks completely control the reporting and prosecution of card fraud".

I also have concerns about the position of fraud as a police priority. There is only one police force in the whole country for which fraud is a paramount consideration, because its police authority insists that should be the case—the City of London police. The view of the British Bankers Association is that fraud is largely "a Cinderella function" for every police force in the country. I do not say that just to score a cheap point. Fraud is not given the priority that it deserves, which is surprising because I am informed by the British Bankers Association that the Home Office's own assessment of different types of crime

"places the harm to society caused by fraud as second only to that caused by Class A drugs, and more than that due to people trafficking."

Many of us might be slightly surprised by that prioritisation, but it is apparently the Home Office's view of the seriousness of fraud in general, of which the cloning of credit and debit cards is a very serious part. As that is the Home Office's view, people might reasonably assume that one or more of the 147 statutory performance or key diagnostic indicators would relate to fraud or financial crime, but that is not so. Again, I am informed by the British Bankers Association that not one of the statutory performance or key diagnostic indicators relates to fraud or financial crime. I happen to know that only last week the association wrote to the Minister for Security, Counter-Terrorism, Crime and Policing to ask why that was the case.

The police are ranked according to the targets and indicators that they have to meet. They are only human, like everyone else, so if fraud is not one of the priorities put on them, they will put their resources towards the areas on which they are ranked and from which league tables are created to show how well or badly they are doing. If the Home Office says that fraud is the second most serious type of crime, why does it not feature among the priorities? That is a fair question, to which I do not have an answer, so perhaps the Minister can enlighten us when she replies to the debate.

I do not think that we know the scale of this crime, but I found out that, according to the Association for Payment Clearing Services, the incidence of overseas fraud using cloned UK cards rose by 126 per cent. in the first six months of 2007, so it is a fast-growing area of crime—probably limited only by the criminal gangs' capacity to manufacture or put skimming machines in place. Frankly, it is easy money. I am not aware that the gang to which I referred have been caught up with. They must be laughing their heads off somewhere with suitcases or bank accounts full of money. Given how they acquired it, perhaps they have better systems to ensure that their bank accounts are not skimmed.

There is a loss to the Exchequer—to UK plc—from the activities that I have been describing. I wrote to all four main high street clearing banks last week and one of them, a major one that may hold many of the bank accounts for the 745 cards that Bedfordshire police knew about last week, said that

"if we discover linked fraudulent events, for example, a petrol station compromising card details, we directly notify the DCPCU."

If the bank was doing that, what did the people at the DCPCU do with the information? Did they just sit on their hands from late November through to the end of January, when enough of my constituents were so fed up that they were almost beating down the doors of Dunstable police station? I was regularly on the phone to acting Chief Superintendent Andrew Street asking him what he was going to do about the crime. I am afraid that the information flow is not working well and something needs to be done about it.

The purpose of the debate is not simply to have an interesting discussion but to bring about change so that something is done. My hope that something really will be done rests in part on a written answer to my hon. Friend James Brokenshire, who will speak from the Conservative Front Bench in this debate. The Minister for Security, Counter-Terrorism, Crime and Policing affirmed the Government's commitment to

"continually assess the effectiveness of new arrangements for reporting and recording of cheque and plastic card fraud introduced on 1 April 2007."—[Hansard, 2 July 2007; Vol. 462, c. 922W.]

I hope that I have demonstrated as reasonably, clearly and logically as possible that the arrangements are not working well. Of course the Government have good intentions; they clearly have no interest in fraud being perpetrated on such a scale. However, I contend that although the Fraud Act 2006 was put on the statute book with the best of intentions, it is failing our constituents in a major way when they could be protected.

Having money stolen from one's bank account is as bad psychologically as having one's house broken into. Someone comes into the most personal and private area of another person's life and takes from them what they use to feed their family, put petrol in their car, put clothes on their family's backs, pay their mortgage and so on. I want action to follow from the debate, and I hope that when the Minister replies she will assure me that it will happen urgently.

Photo of John Leech John Leech Shadow Minister (Transport) 9:51, 19 February 2008

I did not intend to speak in this debate, but having heard Andrew Selous, I decided to make a few comments. I congratulate the hon. Gentleman on securing a debate on this important issue, which is a problem for all our constituents who have suffered credit or debit card fraud.

The hon. Gentleman made a pertinent point when he suggested that we are talking about an invasive crime. When a person is burgled, they know that the crime is over and done with, but people who suffer credit or debit card fraud are never sure what scale of fraud has taken place. A close relative of mine was recently a victim of such a crime, so I know about the impact on individuals.

I want to make some brief points, not about what action the Government can take, but about banks. Banks could do more to assist the victims of credit and debit card fraud, as I know from the comments that were made to the member of my family who was recently a victim. When my relative found out that she was a victim of debit card fraud, she immediately went to the bank and asked it to stop all transactions on her account. She was informed that money was due to go out of her account, but she had certainly not spent it. Although she informed the bank of the fraud before the money actually went out of her account, the bank told her that it had to honour the transaction, because it had taken place.

The bank told my relative that it could not do anything, because its fraud department had to investigate the matter. It said that unless the fraud department was satisfied that the transaction was fraudulent, it could not stop the money going out of her account. In such circumstances, banks should at least delay pre-arranged transactions until their fraud departments have concluded their investigations. Sometimes, members of the public are made to feel that they are in some way responsible for credit and debit card fraud when, in fact, they have done everything possible to ensure that their credit and debit card details are kept secret. In my relative's case, either somebody in a shop used her details to access her bank account or someone in a shop passed those details to somebody else.

Banks could do an awful lot more to reassure customers and to protect their money. Customers should at least be given the opportunity to stop additional money going out of their accounts while investigations take place.

Photo of Lynne Featherstone Lynne Featherstone Liberal Democrat, Hornsey and Wood Green 9:55, 19 February 2008

I am grateful for the opportunity to discuss identity theft and fraud, which is a growing concern for everyone. I congratulate Andrew Selous on securing such an important debate. I know victims of such crimes, and one of the things that most shocked me is that there is no mandatory requirement for the banks to inform the police, as the hon. Gentleman has mentioned. That is complete nonsense when it comes to detecting and convicting for fraud.

We could be forgiven for thinking that because sophisticated anti-fraud card technology has become commonplace, card theft will become a thing of the past. However, the truth is that every time the industry makes a move, criminals become equally innovative in the pursuit of a circumvention of the systems, in particular regarding their ability to clone cards, as the hon. Gentleman has described. However, we should never lose sight of the potentially devastating effect of becoming a victim of credit card fraud. It appears that victims are increasingly in a David and Goliath fight with the banks to get back what has been stolen. In the good old days, banks and institutions automatically reimbursed people, but it is becoming more of a fight as we move towards a cashless society.

I was shocked to find—perhaps I should not have been surprised—that there are more debit cards in circulation than people. In the last quarter, more than £91 billion was spent on plastic card purchases, which puts the matter in perspective and shows the honeypot that attracts the criminal fraternity.

Cards have huge benefits for retailers, because they entail handling less cash and reduced staff fraud. Consumers also benefit—I am sure that we can all find a card or two in our purses. The chip and pin system has been tremendously successful in reducing fraud in shops. Bank costs have fallen from £218 million in 2004 to £72 million in 2006, which is quite an achievement. The system required significant investment from the banking industry, but as returns on investments go, I am sure that they are making their money back.

Photo of John Leech John Leech Shadow Minister (Transport)

The problem with improving security is that people become less concerned about checking whether they are the victims of fraud. They are lulled into a false sense of security and believe that their details are secure. We need to return to a situation in which people check their statements every single month and are far more careful. People used to be like that, but these days they are lulled into a false sense of security because the system is allegedly safe.

Photo of Lynne Featherstone Lynne Featherstone Liberal Democrat, Hornsey and Wood Green

My hon. Friend is right that everyone should take personal responsibility for checking their bank statements and not relax into thinking that everything will automatically be okay.

The banks should not use the security of the chip and pin system as an excuse to reverse one of the fundamental principles of the banking code, which underpins consumer confidence in the plastic card industry. Without customer confidence, the whole house of cards would fall and the system would no longer work. The principle is that the onus is on the banks to prove that a card has been used fraudulently before they can refuse to reimburse a transaction, and the evidence shows that it is coming under attack.

The banks may say that they have invested zillions—or billions or whatever—in chip and pin technology. They may be more reluctant to refund money, because they feel that that investment has made the system relatively secure, but there are two problems. First, credit card fraud has not disappeared with the advent of chip and pin. Secondly, the havoc and hardship to which customers are potentially exposed if they are victim to fraud is totally unacceptable.

The recent increase in disputed payments has ended up with the Financial Ombudsman Service, which is a real indication of a worrying trend. It is not automatic for such transactions to be reimbursed automatically, and there is a quite a time lag. Reports indicate that the service is now dealing with between 20 and 30 cases a week, and, as is the case with any ombudsman service, that is likely to be only the tip of the iceberg. As the hon. Member for South-West Bedfordshire has pointed out, the harsh reality is that many people can ill afford to be without the considerable sums involved.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

Before the hon. Lady leaves the subject of the security checks that the banks have in place, one of my constituents told me how surprised he was to find that money had been withdrawn on the same day in Malaysia and Canada from the same credit card account. The bank did not pick up on that. The system is so automated that checking systems do not seem to be in place, otherwise the bank would have realised that it is a physical impossibility to fly from Canada to Malaysia on the same day.

Photo of Lynne Featherstone Lynne Featherstone Liberal Democrat, Hornsey and Wood Green

I thank the hon. Gentleman for that intervention. I am reminded that my bank called me recently to check on some strange movements in my account, which were all done by me on the same day. The banks are obviously working on the problem, but they have not got their ducks in a row when it comes to realising that it is pretty difficult to withdraw money on two different sides of the world on the same day.

If there is an increase in disputes about reimbursement and a time lag in the return of the money, people will suffer hardship if they are caught up in credit card fraud. Government policies include encouraging pensioners to have a bank account, so that payments can be made directly to the bank and so pensioners no longer need to use the post office. How will someone living on a state pension cope, perhaps on £83 a week, if money goes missing from their bank account for a few months? They may have to go through a protracted battle with the bank.

Hon. Members are capable of having a good stand-up row with the bank, and we all know how difficult it is when one is passed from pillar to post while finding someone who knows what they are talking about. It must be much more difficult for those who are more vulnerable, when sorting out such a mess creates havoc for the most able. Such a situation could be disastrous, possibly forcing people into emergency debt, if they do not know how to handle things. At my surgery, recently widowed pensioners who have never dealt with money before ask for my help. How are they to cope with that sort of problem?

The answer is not always to legislate. As a Liberal Democrat, I do not always jump to regulation as the first option. I obviously prefer to talk it out, but if banks persist in pushing the burden of proof on to the customer, there will be no alternative to regulators taking a tougher line in order to ensure that the police are informed by the banks or financial institutions. The presumption of innocence is a cornerstone of British justice, but if the banks want to continue to rely on British justice when it suits them—protecting their interests in court over fraud problems—they must continue to have faith in their customers.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

Has the hon. Lady considered the position of the Financial Services Authority? I received this letter from the FSA last week:

"We require all regulated firms to have systems and controls to protect themselves and their customers from financial crime, whether committed by staff, customers or others. We monitor the effectiveness of these controls and we take action, including enforcement action, where we find that firms' controls have fallen seriously short."

Does the hon. Lady believe that the FSA should be looking into that, to ensure that those controls are more robust?

Photo of Lynne Featherstone Lynne Featherstone Liberal Democrat, Hornsey and Wood Green

I believe that the FSA should take a tighter view. To be fair, the crime has been zooming up at every stage and at every move and countermove, but it is now time to ensure that what is in place works or to put things in place that will work if there are failures in the system, which there clearly are.

I wish to consider the future of credit card fraud and efforts to foil those who use cloning technology. Figures show that a significant proportion of such fraud is now online. Indeed, online banking losses due to fraud have increased by 44 per cent. from £23.2 million in 2005 to £33.5 million last year. That is easy pickings for would-be online fraudsters. In a virtual world, it is possible completely to bypass the complexity of replicating chip and pin technology—put a reader in place, get your hands on stolen card details and you're away. Only yesterday in Hornsey and Wood Green, a cupboard filled with people's personal data was found in an old housing benefits office. The papers had been dumped by the council when the staff moved out, and squatters reported the matter to The Sun. Details are not always entirely safe, and bank details such as those found in that pile of papers yesterday are enough to make a start.

It is already possible to get plug-in chip readers for personal computers, and it will become easier to do so. It will not be long before the online industry works out how to use personal physical identification—the Government have gone down that road with identity cards and passports. I could go to Tottenham Court road today and buy a laptop computer complete with a fingerprint reader. It does not take a great leap of the imagination to envisage how the industry might turn its mind to the verification of who is using a computer and who is ordering. That might play an important part in helping to authenticate online transactions.

I am a Liberal Democrat—we are nothing if not persistent—and we are averse to automatic biometric database systems. I throw into the pot the fear that such hugely sensitive information can be accidentally lost, whether the situation is similar to that in Haringey yesterday, whether a laptop is stolen from a bank employee's car or whether a data disc turns up in a dumpster. If people are worried about receiving a letter from the bank stating that their banking details had been lost, how would they feel if they received a letter saying that their fingerprints, their iris scan or another physical record—details that are theirs for life—has been mislaid?

Before banks contemplate going down that route, they should give a cast iron guarantee that such monumental data breaches are physically impossible—as we were promised with other data. That is where we could go in an effort to stop fraud. Frankly, I find it incomprehensible that such a large amount of data can be physically downloaded from a computer system on to a disc and taken out of a building. In my view, that should be impossible.

Finally, I would like to consider what the state can do to help banks fight that crime. As the hon. Gentleman has said, we are discussing an international racket supported by organised crime. We welcome the moves to make reporting of the crime easier for the victim, but I have not found much evidence that the Government are responding to an international problem with an international solution. I would welcome some comments from the Minister about what the Government are doing to co-ordinate their response with European police forces. We cannot treat this issue in a silo, because such treatment would ultimately lead to failure as organised criminals pay scant regard to borders and pick off police forces one by one. Some parts of the Lisbon treaty, which is going through now, address some of those issues, but I would welcome the Minister's comments about what she feels can be done specifically to deal with that crime, which, as we have heard, leaps around the world with such ease and causes such grief for its victims.

Photo of James Brokenshire James Brokenshire Shadow Minister (Home Affairs) 10:11, 19 February 2008

May I congratulate my hon. Friend Andrew Selous on securing this morning's debate on what is a very serious and growing issue, and one that affects all our constituents? I can think of a particular case in my constituency in which a petrol station was subject to a skimming attack. Many of my constituents were defrauded and that fraud had a major impact on them. We can look at individual cases. As my hon. Friend said, in one case the details of 745 individual cards were taken from just one outlet. That example highlights how quickly this crime can be carried out and the number of people who can be involved.

My hon. Friend was absolutely right to state clearly that this is not a victimless crime: neither for the individuals concerned nor for the financial institutions that seem ready to bear some significant losses arising from the fraud perpetrated through the skimming and cloning of cards. There is also the direct and personal impact on individual victims of credit card fraud or any other kind of financial fraud. It can be quite traumatic for many people and it dents and knocks their confidence in terms of their willingness either to use their credit card or to engage in other financial transactions.

Mr. Leech highlighted an individual case involving his relative. In many ways, he put this crime into a physical context, demonstrating the impact that this type of fraud can have. The person involved has a sense of their security or safety being invaded or breached, especially as they do not expect to become a victim. So it is perhaps even more shocking when they do become a victim, because the fraud comes out of the blue, when they are least expecting something like that to happen.

Lynne Featherstone was right to make the point that things are moving quickly in relation to this crime. Innovation among criminals presents a growing and changing threat. The banks, Government and law enforcement agencies must be equally fast-moving and reactive in examining criminals' changing patterns of behaviour, and in considering how best we can confront the organised criminal gangs that perpetrate such offences and use the funds obtained for various unsavoury purposes.

APACS, the Association for Payment Clearing Services, is the trade body for the banks and financial institutions, and its figures indicate that the use of counterfeit cards is a growing trend. For the first six months of 2007, plastic card fraud losses as a whole rose by 26 per cent. to £263.6 million. Of that figure, counterfeiting losses, of which skimming forms a part, amounted to £72.3 million, which was a rise of 37 per cent. Given that counterfeiting losses for the whole of 2006 were less than £100 million, we can safely say that the 2007 figures to be released next month will show a significant increase in the losses that have occurred due to the skimming, cloning and counterfeiting of cards and of the metallic strip, which is then put on the back of a number of these fraudulent cards that are subsequently used overseas.

APACS describes the operation of this counterfeiting process quite clearly:

"Most of this fraud involves skimming, whereby a card's magnetic stripe data (on the back of the card) is electronically copied by a criminal. Fraudsters often skim cards by using a device that is fitted to a cash machine or a PIN pad. This data is then transferred onto a fake magnetic stripe card. A counterfeit magnetic stripe card can potentially be used in any UK or overseas shop that hasn't upgraded to chip and PIN or at an overseas cash machine that hasn't been upgraded to chip and PIN - although to use a fake card at a foreign cash machine a criminal will also need to have obtained the card's PIN by separate means."

I suppose that that explains how the advent of chip and pin and the use of other technology has provided an element of protection, but we cannot be complacent about this crime, given that criminals will use technology and other means to get round the chip and pin mechanism and to try to obtain details of the pin numbers. Such numbers can be obtained by various means.

In discussing this issue, we must look at it in its wider context; by that, I mean the overall cost of financial fraud, including banking and credit card fraud. A report for the Association of Chief Police Officers' economic crime portfolio in February 2007 tried for the first time to demonstrate the total cost of financial fraud, of which this type of credit card fraud forms a part, to the UK economy. That report came up with the staggering figure of £13.9 billion in 2005—including the cost of having to deal with financial fraud—of which fraud against private individuals amounted to £2.75 billion. Those are huge numbers and they demonstrate the real cost of fraud and the fact that it is certainly not a victimless crime. Furthermore, it shows the impact that fraud has on our economy, if this level of finance is getting into the hands of organised criminal gangs.

Credit card fraud is part of a wider picture of financial fraud. We might be talking this morning about counterfeit card fraud, skimming and cloning, but that fraud links into the selling of details abroad, using the internet and other technology that is now available. It also links into identity fraud, with the matching of information, such as matching credit card details with other personal information, and how that information is then combined to commit other frauds. Furthermore, once individuals have been identified by fraudsters, they can be targeted time after time.

Also, with the advent of mass e-mailing, phishing e-mails and spam have been used to try to attract people either to some sort of direct fraud or to attract them to visit another website, where they can input their pin number and other information. If fraudsters can identify an individual and match their personal information with the information that has been skimmed off a credit card, it is easy to see how that combined information can be used to perpetrate perhaps even more convincing frauds. Therefore, this crime needs to be focused on clearly, because it is developing very quickly.

My hon. Friend made the point about the use to which these fraudulently obtained funds are being put. Increasingly, questions are being asked about whether such funds are going not only to those involved in organised criminal activity—sophisticated, international, organised gangs—but to those involved in terrorist activities. That is why it is so important that, for our own safety and security, we do all that we can to counteract this very serious criminal activity.

My hon. Friend talked in detail about the changes to the reporting of financial fraud that were introduced last April, since when I have been concerned about not only their practical impact, to which I shall return, but the message that they send. If an individual cannot report financial fraud to the police, that sends the very damaging message that it is not an important priority; indeed, it almost sends the message to criminal gangs that we are not bothered about financial fraud.

Therefore, I remain critical of the way in which the changes were introduced. It was suggested that the aim was to reduce the bureaucracy involved in fraud recording and to streamline the reporting, recording and investigation of fraud. However, nothing happened in the case highlighted by my hon. Friend, in which 745 individual cards were, effectively, stolen after their details were obtained. That highlights a real failure in the system, which is not even operating in the way that was intended or meeting the goals that were set for it in terms of recording and reporting financial fraud.

Last summer, I put several questions to the Government about the manner in which the new arrangement was to operate. In response, the Minister for Security, Counter-Terrorism, Crime and Policing stated:

"From 1 April 2007 each police force now has a single point of contact...that has been set up to receive reports of cheque and plastic card crime direct from financial institutions. It is a matter for the financial institutions which crimes they decide to refer to the police for recording. It is then a matter for individual chief officers to decide which crimes will be investigated."—[Hansard, 2 July 2007; Vol. 922, c. 462W.]

The system almost has two limbs: there is the question of whether financial institutions report fraud to the police, and whether the police do anything about it. From the individual case highlighted by my hon. Friend, it seems that the system is falling down on two levels, because there are questions about whether any of the incidents are properly reported to the police and—even when they are—whether anything is done about them.

It is almost as if a double inertia has been created in the system, which masks the true extent of what is going on. Although we have the figures provided by APACS, the association admits that banks and financial institutions have no common standards governing the reporting of data to the centre or, indeed, whether to report it at all. That raises significant concerns because financial institutions almost have an incentive not to report. There is a fear that they do not want to show the true scale and nature of the problem, and nothing actively encourages them to do so.

I heard clearly what my hon. Friend said about the letter that he received from the Financial Services Authority, and that raises an important point. We must ensure that the regulations that sit behind financial institutions operate robustly and clearly. I hope that the Minister will say that she has had contact with her colleagues at the Department for Business, Enterprise and Regulatory Reform to ensure that the regulation of financial institutions dovetails with other provisions so that we have a streamlined process. When I asked about that a few months back, however, I was given no real assurance that that was happening. Even if we assume that this is the right way forward—there are very real questions about that—the issue must be addressed at several different levels to ensure that regulation is robust and effective.

The second part of the issue relates to the manner in which the police deal with such matters, and there is a certain chronology to the way in which different police forces are intended to investigate such crimes. First, there is the police force covering the location of the fraudulent operation, and then the police force area where the greatest number of individual usages has taken place. We then move down to the police force area where the first offence was committed and finally to that where the victim is located. I appreciate that we need a protocol and standards in place, but such an approach highlights the bureaucracy and complications involved. When someone has become a victim of a crime and wants something done about it, they must go through such a process or even get their Member of Parliament involved if they want the issue addressed.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

Does my hon. Friend agree that one important change that should be made is that people who have their money stolen should be referred to as victims, even if they are reimbursed? That, however, is not how I read the introduction to the Fraud Act 2006.

Photo of James Brokenshire James Brokenshire Shadow Minister (Home Affairs)

The clear point that is being made is that fraud is not a victimless crime, and any suggestion to the contrary is counter-productive and unhelpful in ensuring that we crack down on fraud.

Interestingly, that flows from the issue of reporting, which we have discussed. The answer that I got from the Minister of State last summer stated:

"Where an account holder does contact the police to report this matter without having first spoken to their financial institution, a crime related incident will be recorded and the account holder will be referred to their financial institution."—[Hansard, 2 July 2007; Vol. 923, c. 462W.]

I appreciate that one reason why that change was introduced was that people's experience of reporting such crimes to police stations was not good. Trying to get someone to focus on such things was difficult, and the whole experience continues to draw criticism from individuals and the business sector. However, something is wrong if someone who has taken the time and trouble to report something to the police is turned away and told, "It's not our problem. It's not something we really want to be involved in." Again, there is the question of whether such things are regarded as important and of what message that sends out. That also plays into the issue of whether people will actually bother to report fraud to the police or their financial institution if they are not confident that something will be done about it. If they do not, we will end up with under-reporting and under-recording, and the law enforcement agencies will not have a proper indication of patterns of offending or the nature and scale of the problem that we face.

I have a lot of respect for the dedicated cheque and plastic crime unit, whose representatives I have met. I have been to see its facilities, and I know that it takes this issue extremely seriously. The City of London police, as the ACPO lead on the issue, has also been pushing hard to raise the issue with the Government in the context of the ongoing fraud review, which I shall discuss shortly. However, there is not a level playing field in terms of the response that people receive from individual police forces, and although some police forces are very good, some are not. The Government's target-driven approach perhaps means that if we do not have a target, the issue is not a priority. That has perhaps meant that the discretion that people should have to treat crimes seriously has been fettered, with the result that the offences that we are discussing cannot be treated properly.

I was shocked to hear about an individual case involving a financial institution. The institution had packaged up a number of offences, followed the protocol and given the case to the local police force that was responsible under the ranking system. First, nothing happened. The institution pressed again. What happened? The material was given to the dog handler. The institution was frustrated because it had tried to package the offences up and to give 20 different offences to an individual police force, after which nothing happened, and they were not treated seriously. Getting fraud prioritised and dealt with as a serious crime, in relation to cost and the increasing number of victims falling foul of it, is a serious issue. With the advent of the internet, and the changing nature of offending, the problem will become more serious, and we are not properly prepared either for the threats that we must withstand today or those that the country will face in the months and years ahead.

It seems that there has been no proper assessment of the manner in which the system is being operated. My hon. Friend is right to urge the Minister today to undertake an assessment of the practicalities of the system and the proportion of cases that are actually reported to police forces after financial institutions have been notified, and to find out how many are then investigated. There is no real incentive to take the issue seriously. The way the scale of the problem is almost masked can, in some ways, bizarrely, suit financial institutions, in that it does not show the scale or nature of the problem. One might say that it also assists the Home Office, in that it ensures that the crime figures do not record that level of reporting.

The Government have undertaken a fraud review, and in the spring of 2006 they published their interim report, in which they euphemistically accepted that

"the lack of a national strategy meant that some problems are not being addressed."

From the reports that we have received, and the individual reports of cases, that is an understatement. However, one thing that has come out of the proposal is the establishment of a national fraud strategy and a national fraud reporting centre. In principle, that is clearly a good idea, but I am entirely unconvinced about how it will work in practice. It is one thing to establish a national fraud reporting centre, but how will that fit into the arrangements that have been described this morning? How will it be promoted so that people understand that they should and can report individual incidents to the national fraud reporting centre? What guarantees are there that, even if the reports are sent through, something will be done to provide a proper insight into the nature of the problem and to ensure that criminals will be convicted of related offences, with a consequent reduction in harm?

One of my concerns is that the online environment and the e-crime aspects of fraud reporting have not been properly factored into the establishment of the NFRC. Many industry players to whom I have talked say that that does not appear to have been on the radar screens until very recently. Therefore, practically, I have significant concerns about how effective the arrangements will be. Judging by the feedback that I am receiving, the prognosis is not good. I should be interested to hear from the Minister how the NFRC will tie into the existing reporting arrangements, and what comfort there will be in the sense that, if reports are made, something will be done. Will financial institutions be obliged to share reports with the NFRC? Otherwise it seems as if there will be no meaningful picture on the nature and extent of, or trends in, financial fraud.

The Government have not been speedy in coming forward to address the matter. It does not appear to be the priority that it should be. I suggest that the approach to credit card fraud and e-crime has been lacklustre. Clearly, there is a growing problem, but the Government appear to prefer to see it as someone else's, not theirs. Sadly, it looks as if in the months and years ahead the consequence of that inaction will be that more people will fall victim to this growing crime, with all its impact and effects.

Photo of Meg Hillier Meg Hillier Parliamentary Under-Secretary (Home Office) (Identity) 10:35, 19 February 2008

I congratulate Andrew Selous on securing the debate. I commend him for raising this important issue in his characteristically measured, calm and well researched way.

The hon. Gentleman has raised some interesting and useful points. He has rightly pointed out—as James Brokenshire has mentioned—the impact that such crime has on people. The Government agree that credit and debit card cloning is not a victimless crime. Not only are the individuals who are targeted victims, but the whole of society effectively becomes a victim, because of the issues that he has raised.

It was sobering to hear the example from the hon. Gentleman's constituency involving 745 transactions at one petrol station. However, it is worth highlighting the fact that fraud is not rampant at petrol stations. Rather, those are working environments where transactions are very frequent—people pour through making vast numbers of transactions, which are often small. Overall, such compromises occur in very few petrol stations. There is no particular reason to target petrol stations, other than the fact that they are retail outlets with high transaction rates.

It is worth going into the background to set the scene on the issues around fraud, which have been raised by hon. Members from all parties. I remind the Chamber that credit and debit cards are genuinely a very safe way of going about business. I take issue with Lynne Featherstone on her example concerning pensioners and bank accounts. I am not sure whether it is her party's policy to suggest that it is safer for people to carry large amounts of money. Having had direct contact with many pensioners, and thinking about the amount of money that they could carry around, it is safer for their money to be in a bank account than it is for it to be known that people carry cash in the street or have cash at home.

Photo of Lynne Featherstone Lynne Featherstone Liberal Democrat, Hornsey and Wood Green

I do not want to labour the point, but I simply meant that vulnerable people with very little money can be more exposed if they have to wait for the banks to negotiate or if the banks extend the period before reimbursement, when presented with a case of fraud.

Photo of Meg Hillier Meg Hillier Parliamentary Under-Secretary (Home Office) (Identity)

If I have time, I will touch on some of those points later. We must remember that criminals will identify loopholes and weaknesses in any payment system. The hon. Member for Hornchurch is right when he says that Government and other bodies must be fast-moving to keep pace with that, which is why the Government work closely with industry—the fraud units in industry and banks are often ahead of the game. The Government take the matter seriously, and it is wrong to say that we do not, but it is important for us to work in partnership with others, because we cannot solve the problem alone. There are responsibilities among the financial institutions, and individuals to try to protect against fraud, and the Government clearly have a role. I shall outline what we have been doing, explain why we should not be thought complacent and discuss how we work with the financial sector and law enforcement to improve the situation and tackle fraud.

Levels of plastic card fraud are higher than we would like, but I want to nail one myth: it is not impossible to go to the police to report an incident. An individual is still entitled to go to the police, but the first port of call would normally be the financial institution. The reasoning behind that is that there was a very low rate of reporting to police. Around 5 per cent. of relevant crimes were reported to them, as far as we could identify. It is difficult to be absolutely sure of the reporting level, but it was a very small number. In a case in which, for example, someone is clear that the fraud happened at a particular physical location, it is clearly sensible to report it to the local force, so that something can be done about it in real time. However, that does not negate the importance of gathering intelligence from a range of financial institutions to monitor patterns, which can be passed on to the police.

Photo of James Brokenshire James Brokenshire Shadow Minister (Home Affairs)

Will the Minister accept, however, that when someone takes the time and trouble to go to the local police station and queue up to report an individual financial fraud, and they are then turned away by someone who says, "I am sorry; we cannot help you and you must refer it to the financial institution," it hardly sends an encouraging message about reporting such incidents again?

Photo of Meg Hillier Meg Hillier Parliamentary Under-Secretary (Home Office) (Identity)

I cannot get drawn into what individual police station front desks might say, but if there is a problem with machines attached to banks cloning cards, as in the hon. Gentleman's constituency, the local police would take an interest. However, they would also gather intelligence, because a one-off situation might be lower priority than a situation involving regular contact. It is important that the police set their priorities and determine the most important issues to resolve. I just wanted to nail the myth that people cannot report such incidents to the police. However, it is important that the system works both ways.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

On 9 January this year, the front page of The Luton News reported Bedfordshire police as saying that

"they would only investigate the crime if the real victims—the banks and credit card companies—report the problem, as they are the ones who actually lose money."

Photo of Meg Hillier Meg Hillier Parliamentary Under-Secretary (Home Office) (Identity)

I am not familiar with The Luton News, but I look forward to receiving a copy and passing it on to the Under-Secretary of State for the Home Department, my hon. Friend Mr. Coaker. I am sure that he would be interested to read about that approach from the local police in Bedfordshire.

As the hon. Gentleman has rightly acknowledged, chip and pin represents a major improvement in tackling card fraud. It was introduced to tackle precisely the type of fraud that we are discussing today. The chip makes it impossible to use a cloned card in a cash machine and for a criminal to use a lost or stolen card. The Government supported the banks in introducing that, and fraud on lost or stolen cards fell by 23 per cent. in 2006, compared with 2005, with a further 15 per cent. fall in the first six months of 2007. Losses in this country have fallen, but that has led, as we have heard, to clever approaches by fraudsters to use those cards abroad.

I shall return to my point about how the Government alone cannot solve this problem. I have some sobering statistics that demonstrate the challenge at the international level. In 2006, plastic card fraud losses were £428 million—3 per cent. lower than in 2005—but in the first six months of 2007 losses increased by 26 per cent., compared with the first six months of 2006. That increase was largely driven by increasing fraud abroad on UK-issued cards. Members will be pleased to know that the European banking industry has set a target of completing its chip card roll-out by 2010, which will protect British citizens and their cards from the sort of fraud that we have heard about today.

Last year, the Home Office worked with the Association for Payment Clearing Services and the Foreign Office in order to raise the profile of the problem in the countries that account for the largest amount of fraud on UK-issued cards, and we continue to engage on an international level. That demonstrates, again, that many other people and Governments need to be involved in tackling such fraud. Hon. Members might be interested to know that fraud on UK-issued cards in America is increasing and that, in 2006, it accounted for 14 per cent. of total fraud losses abroad, so clearly work needs to be done. The industry has found it particularly difficult to engage with bodies in America over this problem. However, the Under-Secretary of State for the Home Department, my hon. Friend the Member for Gedling—this is primarily his area of responsibility—recently agreed to write to his political counterparts in the United States to raise the profile of the problem. We hope for progress on that and co-operation from the Americans.

Photo of James Brokenshire James Brokenshire Shadow Minister (Home Affairs)

The Minister has talked about the international aspect, but will she comment on how the Serious Organised Crime Agency fits into the matter? How much of a priority is card fraud for it?

Photo of Meg Hillier Meg Hillier Parliamentary Under-Secretary (Home Office) (Identity)

With permission, I shall ask my hon. Friend the Under-Secretary to respond to that in writing.

As hon. Members have mentioned, the Government introduced a fraud review, which led to us allocate £29 million in order to implement recommendations arising out of it. I shall list the key points: we are setting up the national fraud strategic authority, which will drive UK anti-fraud strategy, as hon. Members have mentioned; we will establish a national fraud reporting centre, which will help to improve our intelligence and information on fraud; and we will establish a national lead force, which will enhance policing capacity. City of London police will be the lead force, and it is already the lead for the south-east. We want to build on its work and expertise in that important area.

I shall explain the rationale behind the approach since April 2007, particularly because it has been criticised by the hon. Gentleman. However, I am pleased that the hon. Member for South-West Bedfordshire has acknowledged that the change to reporting to financial institutions was not necessarily wrong, although, as he has rightly pointed out, perhaps we can continue to make improvements in certain areas.

A great deal of fraud is carried out by organised criminal gangs and it is important that we develop policies in order to understand how best to deploy resources against them. We hope that the improved reporting mechanisms mean that the level of reporting will go up. In many cases, the lack of reporting has meant dealing only with police figures, which are very low. In 2004-05, some 121,000 cheque and plastic card crimes were reported to police. In 2005-06, that figure fell to 88,000, and it fell to 59,000 in 2006-07. That sounds like a good news story, but the figure from APACS for 2006-07 was nearly 2.3 million.

Clearly, there was a level of under-reporting to police, because most people just want their money back. It is not that people are not interested in passing the information on to the police, but they have busy lives and want to get the real problem sorted, which for them means getting their money back. Clearly, that has an effect on behaviour. I stress that there are very severe sentences for fraud by false representation—up to 10 years' imprisonment. Severe penalties can follow an investigation, and we want more introduced as a deterrent to people working in that area. The reporting of fraud is important, and we want to make it easier for people. That is why we adopted that approach, which has advantages for all concerned.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

I am sure that the Minister is coming to this point, but I am not sure when she will finish her speech, so I thought that I would intervene now. I would be incredibly grateful if, before concluding her remarks, she were to address my central point about enabling the police to seize a skimming machine early on. Reporting is one matter, but taking action to capture skimming machines or, even better, to apprehend criminals removing them, is the prize that I am seeking in order to protect my constituents and others from suffering needlessly from such crime over many weeks. Early action should be taken.

Photo of Meg Hillier Meg Hillier Parliamentary Under-Secretary (Home Office) (Identity)

There is nothing to prevent the police from doing that now. I shall move on, before concluding, to some of the other issues that the hon. Gentleman has raised about reviewing the situation.

It is worth highlighting why the new system benefits people. The old system clearly had problems. The account holder can now go to their bank knowing that the information will be, or should be, filtered through to the police, where appropriate. Financial institutions now have a single point of contact in each force, which is key. I met with the single points of contact for different forces and other organisations in the country at the end of last year.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

Why does the Minister think that, despite the 745 people—not individual transactions—who had money stolen from their cards, not one bank or credit card company contacted the single point of contact in Bedfordshire police?

Photo of Meg Hillier Meg Hillier Parliamentary Under-Secretary (Home Office) (Identity)

I do not know the answer to that. We need to look at why that happens and whether it is a regular occurrence. Later, I shall touch on how the Home Office wants to review the current situation.

The single points of contact will develop expertise. In the past, when cases were reported to police station front desks, it was not always clear whom they should be reported to. That was certainly a problem in cases involving complicated transactions involving several frauds in different locations, some of which might have taken place outside the local force's area or even abroad. It could get very complicated for local police forces. Single points of contact will develop expertise and allow intelligence to be shared between different points of contact with others in the local police force and with the national fraud reporting centre. That will help to build up a pattern of intelligence. That means that resources can be targeted at the most important cases in which there are the highest number of victims or the most serious incidents.

The other benefit of the new system is that the police do not have to wait for correspondence from the financial institution while they assess whether the report concerns a genuine fraud. The police have an important duty, as do the financial institutions, to ensure that a fraud that is reported is indeed a fraud. I was perplexed by the comments from the hon. Member for Hornsey and Wood Green about how the financial institutions check out fraud. It is important for the banks to have a process, but that is not for the Government to determine. The banks must ensure that they investigate, otherwise fraudsters will have—excuse the phrase, Miss Begg—a blank cheque to claim fraud on their accounts. They would have their money reimbursed, if we were to pursue to the end the hon. Lady's approach.

Photo of Lynne Featherstone Lynne Featherstone Liberal Democrat, Hornsey and Wood Green

The point that I was trying to make is that it is becoming more difficult for people to secure reimbursement, because banks are introducing more investigation. No one says that the banks should not investigate, because they must, but the number of cases referred to the Financial Ombudsman Service is increasing. I should have thought that the Government would be interested to learn about that and concerned about the extension in the time taken to investigate.

Photo of Meg Hillier Meg Hillier Parliamentary Under-Secretary (Home Office) (Identity)

I welcome the hon. Lady's clarification.

The hon. Member for Hornchurch asked how the national fraud reporting centre will work in practice, and I hope that I just answered some of that question. The centre will bring together the pattern of intelligence, just as in each local force, officers and lay professionals gather and analyse the data and intelligence to see the patterns of crime in an area. Similarly, the national fraud reporting centre will make such determinations, provide the data and intelligence to local forces and see whether there is a pattern throughout the country and internationally. It is worth stressing that the crime is international, as the figures that I have stated demonstrate. Therefore, intelligence gathering must be undertaken centrally. It would be an enormous burden on an individual force to try to tackle the issues internationally.

Photo of James Brokenshire James Brokenshire Shadow Minister (Home Affairs)

I want to clarify with the Minister one specific point: how the current situation, with reports effectively going to financial institutions, will interrelate with the NFRC. If that information is not channelled from the financial institution to the NFRC, it will receive not a full but a partial picture. It will not receive the intelligence and patterns of criminal behaviour that the Minister has addressed in her comments.

Photo of Meg Hillier Meg Hillier Parliamentary Under-Secretary (Home Office) (Identity)

The financial and banking industries have been very positive about the establishment of the NFRC. I cannot see any reason why they would not want to participate, and it is not the impression that we have been given. They are very keen on, and supportive of, the centre's establishment.

Photo of Meg Hillier Meg Hillier Parliamentary Under-Secretary (Home Office) (Identity)

If the hon. Gentleman will forgive me, I must conclude my comments.

The hon. Gentleman also raised the issue of fraud as a policing priority. It clearly competes with other serious and organised crime for policing priority, but the Home Office is consulting on a measurement framework to determine whether we can establish the levels of investigation and success. I stress again how seriously the Government take the issue. We have put in money to set up the mechanisms that I have outlined to ensure that there are better procedures not only to tackle fraud but to examine how we measure it.

The hon. Members for Hornsey and Wood Green and for Manchester, Withington (Mr. Leech) have raised a couple of points. The hon. Member for Manchester, Withington raised an individual case anonymously, but it is difficult to comment on an individual bank's approach to fraud investigation. Financial institutions must take operational issues into account, but that is not the subject of this debate.

The hon. Member for Hornsey and Wood Green has mentioned fraud that is growing through remote channels, which is a concern. There are several technical solutions to such fraud, including hand-held readers, and the Government are working closely with financial institutions to encourage the take-up of such initiatives by banks and the public. In the long term, I am responsible for the Home Office's and the Government's approach to identity cards, and we are at the early stages of investigating how that technology might benefit customers and financial institutions in that situation.

It is worth highlighting the protective measures that individuals can also take. We in the House are responsible for reminding all parties and the public of what can be done. I urge the public to look out for attachments on cash machines—if something looks fishy, do not use it. If a credit card is taken out of one's sight, especially abroad, it is a risk, and it is always best to keep one's credit card in view. One simple measure is for people to advise their bank when they travel abroad legitimately, because it helps the bank to build up patterns of behaviour—including the interesting patterns that the hon. Lady has dangled before us, but about which she did not go into detail—to ensure that it is the customer's behaviour, not the fraudster's. Using only locked and secure websites is also important. People frequently give out information online to anything that looks legitimate, but it is important that they are aware of the security issue, as the hon. Lady has rightly said.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

Will the Minister ask either the Minister for Security, Counter-Terrorism, Crime and Policing, or the Under-Secretary of State for the Home Department, Mr. Coaker to write to me about the assessment process that the Minister for Security, Counter-Terrorism, Crime and Policing promised would be in place in his written answer on 2 July 2007?

Photo of Meg Hillier Meg Hillier Parliamentary Under-Secretary (Home Office) (Identity)

Absolutely. I am happy to do so. I shall ask my hon. Friend the Under-Secretary to examine the lack of reporting in the case that the hon. Gentleman has raised. During my hon. Friend's normal discussions with the banking industry, the matter would probably come up, but I shall ensure that he is aware of the particular case that the hon. Gentleman has mentioned.

As the hon. Gentleman has said, my right hon. Friend the Minister for Security, Counter-Terrorism, Crime and Policing stated in his written answer that we are keeping the situation under review, and we continuously assess the effectiveness of the arrangements. The process is continuous, so there will not be a big-bang moment, but this debate has been useful in highlighting some of the issues arising from the new reporting system. I stress that it is still, none the less, an improvement on what went before, and we are trying to streamline reporting and information gathering. With that intelligence and data, the police and the financial institutions will be better able to protect the public, who are the big victims.

My right hon. Friend has a steering group, comprising law enforcement agencies and banks, which meets regularly, and I shall ask him to put the issue on the agenda at his next meeting. I thank the hon. Gentleman for raising the issue with me today.