Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.Donate to our crowdfunder
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank Chris Elmore for securing this debate. He and other hon. Members have campaigned consistently on this extremely important subject. I thank all hon. Members who made contributions. As Jim Shannon said, this issue affects each and every constituency, and we all know someone, whether personally or professionally, who has been a victim of a scam or an attempted scam.
The examples that hon. Members gave show the range of scams that criminals can pursue and the range of people who can be victims. We rightly tend to focus on the most vulnerable—particularly the elderly, who are exploited by fraudsters because of their age and, the fraudsters assume, their frailties—but as the hon. Members for Strangford and for Westmorland and Lonsdale (Tim Farron) highlighted, these scams are not restricted to the most vulnerable. They are now so sophisticated that they can take in people who would ordinarily think that they are able to withstand such efforts. The methods that fraudsters use include playing a recording of a call centre in the background so it sounds like they are calling from a large call centre, which reassures the victim that the call is legitimate. There are huge challenges, not just for law enforcement, which must respond robustly, but for us as individuals. We must ensure that we are as knowledgeable as possible about these scams to protect ourselves, those we care for and those we think may be vulnerable. I will go into that in a bit more detail in due course.
The Government take this harm extremely seriously. Fraud is the second most prevalent crime in England and Wales. The crime survey estimates that there were 3.6 million frauds in 2018. Victims can suffer serious financial and emotional harm, and the money that fraudsters make can fund other serious organised crime. Although we have made substantial progress, the Government’s efforts to tackle scams and fraud in general are focusing on three areas: the policing response to fraud, reducing vulnerabilities, and the care and service that victims receive.
We are clear that the law enforcement response to fraud must improve. The previous Home Secretary, my right hon. Friend Amber Rudd, requested that Her Majesty’s inspectorate of constabulary and fire and rescue services conduct an inspection of the police response to fraud because we wanted a much clearer view of how fraud is being investigated and what improvements are needed. The inspectorate’s recent report highlighted key weaknesses in the police response, suggesting that significant improvements are required to ensure the efficient and effective operation of the current fraud policing model. In practice, that means local and, increasingly, regional investigations, supported by national functions.
The hon. Member for Strangford rightly said that fraudsters do not recognise geographical boundaries. On his point about the UK-wide response, we very much recognise the need to develop a national policing strategy for fraud, which will address, for example, how the Police Service of Northern Ireland can link with the overall national strategy. The City of London police is the national lead force for fraud and serves as a national centre for the collection and sharing of intelligence across the four regions of the United Kingdom. We very much take on board the hon. Gentleman’s point about the cross-border implications for the internal borders in the United Kingdom.
The inspectorate’s report and 16 recommendations demonstrate that the policing response to fraud must improve. My right hon. Friend the Minister for Security and Economic Crime, who apologises for not being able to be present today, takes this matter extremely seriously. He expects that the report will be taken seriously by chief constables and police and crime commissioners alike. We are working with the police and other law enforcement agencies to take forward those recommendations and challenge fraud at a national, regional and local level. The shadow Minister rightly asked about the statistics. I will take that point back to the Minister for Security and Economic Crime.
Let me turn to reducing vulnerabilities. In addition to improving the police response to fraud, we must also address the vulnerabilities in systems that fraudsters exploit if we are to make the UK a harder target for fraudsters. The hon. Member for Ogmore gave the example of a fraudster citing the DWP in a scam that one of his constituents suffered. We recognise that the Government and law enforcement must work closely with the private sector, as well as with each other. Agencies such as Her Majesty’s Revenue and Customs are leading the way in the fight against online and phone fraudsters and are working relentlessly to close tax scams and raise awareness.
In the previous financial year, HMRC reported more than 12,000 malicious websites for takedown, recovered hundreds of misleading HMRC-branded domains, initiated the removal of hundreds of phone numbers used to perpetrate HMRC-related phone scams, and increased education efforts to ensure that the general public are aware that people may use HMRC’s or other agencies’ branding to try to extract their much-needed and carefully saved savings and income. Those education campaigns are being run by the media, television and newspapers. In 2016, HMRC identified a significant increase in the number of customers receiving malicious HMRC-branded texts. With the phone industry, it piloted award-winning controls that resulted in a 90% reduction in reports of such scams. The lessons learned from that are being scaled into a solution for the whole of the United Kingdom. As was reported at the weekend—hon. Members mentioned this—HMRC is deploying new controls to put an end to fraudsters spoofing the tax authorities’ most recognisable helpline numbers.
Nuisance calls are a source of extreme irritation for many, but for the most vulnerable they can also be incredibly stressful and harmful. We have taken a range of actions to reduce the number of nuisance calls. We have banned cold calls from personal injury firms and pension providers, as hon. Members noted. The hon. Member for Ogmore asked for an update. I will ask the Minister for Security and Economic Crime to write to him about that. It is very early days, but hopefully we can provide some information to him.
We have also introduced director liability for nuisance calls, and we are supporting national trading standards in rolling out call-blocking devices to vulnerable people. Members of Parliament have a real opportunity to help our constituents to understand the ways in which scams can operate and what we can do to protect ourselves against them. I recommend the Take Five to Stop Fraud scheme—a joint awareness campaign run by the Government and UK Finance, which provides simple advice to prevent people from falling victim to scams. The key message is that people should take their time when making a new payment, because fraudsters will try to rush them, as some of the very sad examples highlighted in this debate show.
The response to scams and fraud in general requires a collaborative, innovative response, because as we catch up with criminals, they will find other ways of exploiting technology to present new challenges and find new ways to steal people’s money. That is why the Government created the joint fraud taskforce: to better protect the public and businesses from fraud, reduce the impact of fraud on victims, and increase the disruption and prosecution of fraudsters. We continue to work with the taskforce to build on successful initiatives, such as the banking protocol—it has been discussed today—which is a code of practice to help banks to identify victims and alert law enforcement. It has prevented more than £48 million from falling into the hands of fraudsters and has led to more than 400 arrests.
We also welcome the publication of the voluntary industry code. It marks a significant step forward in the fight against authorised push payment frauds, which involve tricking customers into sending money to fraudsters via a payment service provider. To give an idea of the scale of the task, in the first half of 2018, consumer losses from APP scams amounted to around £145.4 million, of which just under £31 million was repaid to customers. The code will ensure that sending and receiving payment service providers will take steps to protect their customers, including with procedures to detect, prevent and respond to APP scams, with greater protection for customers who are considered vulnerable to that type of fraud.
The hon. Member for Westmorland and Lonsdale asked about the retrospectivity of the code. Again, I will raise that with the Minister for Security and Economic Crime. There are no plans to force banks to apply the code retrospectively, but there are certainly no rules or laws in place that prevent banks from making good-will payments. We also encourage victims of APP scams who have not been compensated by their bank to lodge a complaint with the financial ombudsman.
As the hon. Member for Strangford said, the code is voluntary, but to reassure hon. Members, the current signatories of the code cover approximately 85% of APP scams, and the Payments Systems Regulator, which leads the development of the code, actively encourages banks to sign up, as does UK Finance. In addition, the Financial Ombudsman Service will take the code into consideration when determining cases, regardless of whether the bank in dispute has signed up to the code.
On the other work that the payments industry does to prevent APP scams from occurring in the first place, the confirmation of payee service is the industry-agreed way of ensuring that names of recipients are checked before payments are made. Essentially, it is an account name checking service that can help to avoid the misdirection of payments. The industries developing the service say that it can be implemented by payment providers during the course of this year.
Regulators and industry are taking further action to increase payment security and reduce fraud via stronger customer authentication. From
It is also right that we look at the service provided to victims of scams and fraud. Two economic crime victim care units have been established to better identify vulnerable victims of fraud and ensure that they are provided with the right level of support. That includes practical advice, support and guidance to help victims to cope and to prevent them from again falling victim in future. The units have been trialled in the Greater Manchester and West Midlands Police force areas, and an assessment will be completed this year to help to measure the impact of the scheme.
With funding from the Home Office, National Trading Standards has piloted local multi-agency hubs to ensure that victims of fraud receive support from the local agency best able to provide it, whether that be the police, social services or charities. At the risk of boasting about my own county, in Lincolnshire—one of the pilot areas—the local police, National Trading Standards and a health trust have worked in partnership to train 1,000 health and social care professionals to identify and support older people who have been, or may be, the victims of doorstep crime and scams.
A strategic action plan has been developed by Victim Support and National Trading Standards, with Home Office support, to ensure that the service received by fraud victims is rapid, appropriate and consistent, and takes into account any specific needs that they may have that might make them particularly vulnerable or susceptible to fraud. The joint fraud taskforce is working on a technical and regulatory framework to ensure that more fraud losses can be returned to victims. Work is also being undertaken to test the technology that can trace the movement of funds back to their source. The next step will be for banks to agree ways of operating that allow for the freezing of funds, a system of dealing with disputes and, ultimately, the return of stolen funds.
We all take this threat very seriously. The responsibility is shared by all concerned agencies, both in the public and private sectors, which is supported by civil society. I am extremely grateful to the hon. Member for Ogmore for providing the opportunity to discuss this fraud, innovative ways of tackling it, and ways to ensure that the Government’s steps are monitored and have the impact that we wish them to have. This is a piece of work that, I am delighted to say, many colleagues across the House, not all of them here today, have shared in common to ensure that the financial and social damage that such invasive crime inflicts on some of our most vulnerable citizens is tackled and stopped.