I beg to move,
That this House has considered telephone and online scams.
It is a pleasure to serve under your chairmanship, Mr Hollobone, and to have the first debate back after the brief Whitsun recess. It is good to see the Minister in her place. I am grateful to her; I understand that, due to personal circumstances, she is covering for the Minister with responsibility for this area, the right hon. Member for Wyre and Preston North (Mr Wallace). I am also grateful to my hon. Friend the Member for Torfaen (Nick Thomas-Symonds), who is covering for the shadow Minister for policing, my hon. Friend the Member for Sheffield, Heeley (Louise Haigh). It is a covering event today, but I am extremely grateful to the Front Benchers for being in their places.
We do not need to be weekly watchers of “Watchdog” to know that scams are a scourge in our communities. We all hear examples week in, week out of constituents, friends and family who have been targeted by scams. In 2019, those scams are far from the more traditional forms of fraud we have seen in the past. There is no face-to-face interaction with the perpetrators of the crimes and people are not being targeted like the celebrity scammers in “The Real Hustle”. Instead, millions upon millions of individuals are being targeted in the safety of their own homes. Whether it is through a phone call, an ad that people see on their smartphone or a rogue email, the methods used by these hidden fraudsters are becoming more and more sophisticated every day. Today, I am calling on the Government to do one thing: to expose the fraudsters and get ahead of the game so that we can stamp this scam culture out once and for all.
Why are scams such a problem? Many might say, “Don’t be stupid. Anyone can tell the difference between a scam phone call or email and a legitimate communication,” but the truth is that, with the increasingly sophisticated methods being employed and the vulnerable people being targeted, we cannot rely on that assumption, and the statistics show that. Picture an 80-year-old living alone in an area of high crime. They get a call from someone purporting to be from the Department for Work and Pensions inquiring about a problem with their pension. They rely on their pension to get by and trust the caller because they have said they are from the DWP. The caller tells them that their pension payments may be put on hold if they do not provide some personal details over the phone. Can we all honestly say that we do not know of elderly family members, friends or constituents who would not be tempted to go along with that? If someone is being told that their money might stop if they do not co-operate, they could well be driven into a false sense of security and provide the information being asked for.
One of the key problems is that, whether over the phone or online, criminals are taking on the role of responsible and trusted sources to coerce potential victims into co-operating. While that is a big problem for vulnerable populations—particularly the elderly—it by no means stops with them. Many Members may well remember the recent cases where the face of the “Money Saving Expert”, Martin Lewis, was being used on targeted online advertisements on Facebook. It was not just one Facebook advert, but some 1,000 targeted Facebook ads that were using that trusted figurehead. They were glossy and looked legitimate, but ultimately they were seeking to pillage money from those who could least afford it. That just shows how wide the problem goes. If we cannot trust an advert with the face of the “Money Saving Expert”, what and who can we trust?
One constituent even approached me recently about a scam involving emails asking for information being sent from my own parliamentary email address. That issue has been referred to the House authorities. Most recently, just last week another constituent emailed me saying that a false email had come with my name on, but that was not from my email address. The constituent rang my office, querying why I was using a different email from my normal parliamentary one. Thankfully, they had had correspondence with me before. Even as Members of Parliament, trusted as we are with handling the personal information of constituents, our names are being used. I only knew about it because of that particular constituent, who was savvy enough to realise that the email was not mine, but a fake one, which was asking for personal information, including their national insurance number and their bank details. None of us are immune from the issue.
On the one hand, it is positive that clearly not all the public think of politicians as untrustworthy if they are putting us front and centre in pushing a campaign. But on a serious note, it shows how concerned we should be about the tactics that criminals are using. In the era of fake news, where there is an ever-important need to look over anything we see or hear with a critical eye, the hidden fraudsters who seek to steal our money online will adapt their methods in ways we least expect. That is why the issue is so important. It is not going away. If we manage to hold back the tide of scams out there today, the scams of tomorrow could be completely different, and we have to be prepared for that.
How big a problem are we talking about? Age UK found that up to 5 million people over the age of 65 believe that they have been targeted by a scam. It also found that single, older people are far more likely to respond to a scam than younger, married people. As many Members will know, around half of over-75s live alone. That just illustrates how elderly people are particularly vulnerable to this menace. That, in part, is where the real injustice lies with our current approach. What would our response be if 5 million older people had been a victim of an attempted burglary? There would be an urgent question on the Floor of the House, and it would rightly be declared a crime wave.
The statistics show that the over-65s are a staggering three times more likely to be targeted by a scam than be burgled. Scams pose less risk for the criminal than a standard burglary, with the number of potential victims rising exponentially as a result. Half a billion pounds was lost by UK banking customers due to scams in 2018. Remarkably, the charity Think Jessica estimates that as few as 5% of scam victims report the crime committed against them. That fact alone tells us that the statistics could well be the tip of the iceberg. But unlike icebergs, the issue is not melting away. In fact, the figures from all agencies, including the Government, suggest that the issue is getting worse.
Figures from the Office for National Statistics show that in 2018, the number of reported fraud incidents rose by 12% on the previous year, equating to an astonishing 3.6 million individual cases. Sometimes that might be a fiver or a tenner stolen, but more often than not we are talking about much greater sums of money or personal information that can never be recouped. While £5 or £10 might not seem like an awful lot of money, for someone on universal credit or, worse still, appealing a universal credit decision, that £5 or £10 could be an awful lot of income for their household. Likewise, once people have become victims of fraud, it can be incredibly difficult for them to recoup the money they have lost. I recently helped a small business in my constituency get back nearly £20,000 that it lost in a scam after a long battle that the constituent had endured with his bank. That just shows how this crime can have a prolonged and significant impact on victims, and that impact is not only financial; it also puts strain on family and business. It simply is not good enough.
Just as the last Labour Government were tough on the causes of crime, it is now time we got tough on the scourge of hidden crime. Put simply, an epidemic of scams is sweeping across the country, and I know that south Wales is a particular hotspot. Every week in my inbox and during advice surgeries, I am contacted by constituents who have been targeted by the increasingly sophisticated techniques that I have outlined. Whether in written form, online, via text message or over the phone, the sophistication of the targeting seems to know no bounds. The criminals who sit behind a computer or a phone and think they are immune from the law need to be exposed as the hidden fraudsters they are. The very fact that many scams are targeted at the elderly and the vulnerable shows just how low these cowards will stoop in pursuit of a quick buck. With many communities still suffering under the strain of nearly 10 years of Government austerity, the money being stolen by scammers can push people’s finances to breaking point.
As with everything involving technology, there is no silver bullet to stop this problem, but there are things the UK Government can do to stem the tide and deter other freeloaders from seeking to cash in on our communities. We first have to look at the police’s approach. Tackling fraud online and via the telephone is not a strategic policing priority. The police watchdog, Her Majesty’s inspectorate of constabulary, found only two months ago that the public are being left at risk because forces do not consider fraud to be a priority. One officer told the inspectorate that, despite people being more likely to fall victim to fraud than any other crime, it was falling behind other offences because it does not “bang, bleed or shout”.
The inspectorate’s report warned of a “disjointed and ineffective” response across England and Wales because of the lack of a national strategy. I therefore ask that the Home Office ensures that tackling such fraud becomes a strategic policing priority across all our forces. At a national level, will the Minister—perhaps she will pass this on to the Minister responsible—update Members on the progress made by the joint fraud taskforce? As I have mentioned, the ONS has found that fraud is increasing, not going down. Members across the House therefore need to know what the taskforce is achieving.
On a more positive note, I was pleased to see the introduction of the pension cold-call ban in January. I warmly welcome that effective step from Ministers. Although I recognise that the effects might not yet have been assessed, I am sure that all Members would appreciate it if the Minister provided an early indication of the effectiveness of the policy. Likewise, given that we know that fraudsters often adapt their tactics when avenues are closed off, the Government need to outline what they are doing to prevent other fraud—for example, online scams—from increasing following the cold-call ban. As I have said, the backdrop of austerity cannot be ignored when addressing this issue. The cuts to local government across England and to the Welsh block grant have undoubtedly had an impact on trading standards’ ability to tackle scams.
I want to praise the work of my local trading standards team for its work to raise public awareness of the threats posed by scams, particularly through its Friends Against Scams initiative. I also pay tribute to my local force, South Wales Police, which has done a huge amount to try to support constituents who have been scammed. There is a wider issue, in that once someone has been scammed, particularly if they are older, vulnerable and living alone, there is an element of embarrassment and they feel they cannot report it. South Wales Police has done huge amounts of work locally and across the region to try to reassure people that the scam is a crime and they deserve justice.
It cannot be denied that trading standards could do much more to tackle the problem if they had more resources. What representations will the Minister make to the Chancellor in advance of the spending review to free up funding to get to grips with the issue? The sheer scale of the crime means that one agency cannot tackle it alone. Increasing resources will mean that trading standards can work in a much more joined-up way with other agencies, such as the police and local adult social care services.
Although public awareness tactics have been used in the past, there is a need for a much more far-reaching and targeted campaign. Simply using Facebook adverts or leaflets in Government-owned buildings will not work. There is an irony, in that while many of those targeted are over 65, there is an issue about digital inclusion, access to broadband across the United Kingdom, and access to computers and the digital technologies through which advertising campaigns could work, yet lots of the people targeted do not have access to those services, so we arguably need to raise public awareness through television and other sources. We need to reach out to our communities, particularly our elderly residents, with the latest information on what types of scams are out there and how they can prevent themselves from becoming victims. The Government must see that as an investment in our communities against a problem that will only worsen if we allow the epidemic to continue to take hold.
Nobody likes the feeling of being violated by a criminal. No matter what the scale of the crime is, the feeling is still there to an extent, and yet there is a silent crime wave sweeping across the UK that very few people talk about, and the Government are not doing nearly enough to address it. It is time we got real with these hidden fraudsters and prevented them from inflicting any more damage on the communities we represent. Whether it is a family member, a friend or someone living down the street who we do not know, nobody deserves to have their money or personal information stolen from them. It is time we shouted louder and stemmed the tide. Whether it is £20 or £20,000, the Government must show today that they are serious about tackling the criminal black hole being inflicted on people’s finances. Warm words and sympathy are welcome, but they do not resolve the problem.
We are going backwards on tackling this problem. We need to get on the front foot and ensure we are ahead of the criminals. The word “scam” has become synonymous with something we cannot control of late. Today the Government—I know the Minister will do her best—need to step up and show that that is simply not the case.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I am grateful to the hon. Member for Ogmore (Chris Elmore) for securing this extremely important debate. As he has rightly set out, the growth in recent years of online and telephone scams, which are often combined, is a deeply troubling development. The impact on individuals is colossal.
I can think of three examples that I am working on in my constituency. An early-retired teacher was recently scammed into investing £25,000 into a fake bond through an incredibly plausible copied website of a reputable bank. A young man who works in the arts was recently scammed out of an amount just shy of £50,000; he was presented with what was apparently a bill from Her Majesty’s Revenue and Customs, and was told that if he did not pay, he could be subject to prosecution. A couple who had no conventional pension were convinced by a combination of telephone and online scamming—their computer, but not their online banking operation, was hacked—into transferring nearly £200,000, which has utterly destroyed their retirement. Those are three instances of bright, not terribly elderly people being scammed by sophisticated criminals. It has had a massive impact on those people’s self-esteem; the hon. Member for Ogmore rightly talked about the sense of violation felt by victims of these scams. They have had their lives trashed, and, in one case, their retirement turned upside-down. The impact on the victims of online and telephone fraud is colossal, and we need to be aware of it.
My quick assessment of the people I am supporting through my constituency office is that there has been roughly £1 million of personal fraud perpetrated on individuals across the age ranges. Almost all the cases focused on online fraud. As the three cases I mentioned have not been resolved, we have been successful in getting significant amounts of compensation—full compensation for some—for victims of fraud in my constituency, but in the other cases, there has been nothing as yet, which is completely unacceptable. The hon. Member for Ogmore rightly pointed out the rise in fraud and the amounts of money involved. In the first half of 2018, there was some £95.7 million of online fraud.
I want to draw a correlation, which is not complete, but is hugely significant, with the loss of bank branches and physical banking opportunities in our communities. My constituency of Westmorland and Lonsdale has pretty much the same geographical area as Greater London, though it has a slightly smaller population. Of all our towns and villages, only two retain physical bank branches. In the past three or four years, we have seen the closure of branches in the villages and towns of Milnthorpe, Grange, Ambleside, Sedbergh, Kirkby Lonsdale and others. To a degree, bank branch closures have come about because banks have responded to our changing banking habits. I understand that, but they have pushed it. It makes life a lot easier and cheaper for the banks if we completely relate to them online. It saves them a fortune. Think of the hundreds of thousands of pounds that banks will have saved, in my constituency alone, in wages, rent and overheads by closing down branches. When they have owned the buildings, they have had a huge cash sale capital receipt, and the money they have saved has gone into their profits.
There is also a correlation between the increase in online fraud and the decrease in the number of bank branches in our communities. Recklessly, banks have put customers—particularly, but not exclusively, older ones—at greater risk, while saving millions upon millions of pounds. I do not say that there is no business case for some branch closures, but the banks have been reckless, and have done nothing—or very little, having left it very late to do anything—to help victims of the increase in fraud as people who feel less comfortable going online have become more likely to feel obliged to do so. The banks have increased risks to their customers—our constituents—while saving themselves a fortune.
Authorised push payment scams are key to what we are talking about. We should welcome the voluntary code that came in just a few days ago, which I hope will result in significant changes. At the moment, if someone has been the victim of an unauthorised scam—in other words, if someone else has got hold of their details and taken money out of their account—nine times out of 10, or perhaps 99 out of 100, the bank will compensate them. If, however, someone has been fooled into moving some money out of their account themselves, as in the three instances I just related, nine times out of 10 they are on their own. The authorised push payment scams voluntary code ought to mean that future victims of authorised push payment fraud will be compensated.
Of course, all the people I have spoken about—indeed, all the people we will talk about today—are historical victims. Whether they were scammed in the last few weeks or the last few years, they stand to get not a penny of compensation. It is very good to see the Minister in her place. I really want her to focus on what we will do to help people who have been victims historically, which is everybody apart from those scammed in the last week. I ask her to take action so that the code can be applied retrospectively to all victims of authorised push payment scams.
The hon. Member for Ogmore rightly talked about the need to catch the criminals who do something so utterly despicable. My police force in Cumbria is under enormous resource constraints, but is doing a good job, in so far as it can, in providing support. In recent days, local media have reported on the relatively small number of police available to respond to incidents in our community. One of the reasons for that is that many have been taken off to do this kind of work. It is important to recognise that our police force must be given additional resource to catch those who are guilty of such crimes, and to support victims.
I thank the hon. Gentleman for taking part in the debate. I am in the police service parliamentary scheme. What struck me when I met one of the victims of such fraud is the sheer scale of the paperwork that the police have to complete. They told me that that is because the back-office functions have been cut, as there is no funding, which creates additional pressure. The police want to deal with these cases. The hon. Gentleman is right that there are not enough officers to do so, but it is also about the paperwork involved, because the fraud is so complicated. The police have to have an hour’s discussion with the person who has been defrauded. Does he agree that there has to be specific funding, not just for trading standards but within the police, so that they can tackle the problem as broadly as possible?
I am grateful to the hon. Gentleman for raising an important point. One issue is resource; another is time and expertise. We are not dealing with stuff that is simple to fix. He is right that one of the impacts of, let us be honest, the underfunding of our police service in the last few years has been that police commissioners seek to protect the number of visible police officers, for good reasons and because it is politically sensitive. How do they then save money? They get rid of all the admin staff. Police are therefore unable to focus on frontline policing, because they are taken off to do the admin work that the back-office staff used to perform.
Banks are saving perhaps hundreds of millions of pounds by closing branches and changing the way in which we relate to them, but they thereby put our communities at greater risk of online and telephone fraud. There is a real opportunity for the Government to take—not in a punitive way—a small fraction of the profits that banks have made by closing those branches. That windfall tax could be used for two purposes: compensating victims and resourcing our police service properly, so that we can protect people.
I would love the Minister to give us more information on those two points. First, will she backdate the code and ensure that it has teeth, so that historical victims of authorised push payment scams are compensated, as well as future victims? Secondly, will she consider a windfall tax on the banks, based on the profits they make from closing so many branches, so that we can resource our police properly, in order to protect the victims and pursue the criminals?
It is a pleasure to speak in the debate; I thank the hon. Member for Ogmore (Chris Elmore) for introducing it. It is also a pleasure to follow the hon. Member for Westmorland and Lonsdale (Tim Farron).
Every one of us elected representatives will know people who have been scammed. I will give a couple of examples, though I cannot put a figure on the moneys scammed from the people I will refer to. I was recently made aware of a successful scam whereby a lady was relieved of her entire retirement savings of some £20,000—basically, her life savings. She was a schoolteacher; it is funny that the lady to whom the hon. Member for Westmorland and Lonsdale referred was a schoolteacher as well. I do not mean to be negative in any way—just realistic—but one would have assumed that they would have been well aware of what was before them.
This lady was the head of the English department, and was very active in her local church. She is a very bright lady who is still very much with it; she is under 70. To put it simply, she fell for an elaborate scam. A man who sounded as though he were in his 50s, knew the banking lingo, and was polite to the extreme agreed to ring her back after she said that she was busy and could not speak because she was leaving her grandchild at school. He called back at the time they had agreed and went through what seemed like the logical steps to stop a scam from taking place. Unfortunately, he was the scammer, and he knew exactly what he was doing.
The point that I am trying to make is that even the best people can be scammed if they are not careful. Perhaps the scammer once worked in a bank or in the financial sector. Certainly he sounded beyond plausible by the end of the call. This lovely retired teacher’s husband was a long-distance lorry driver. They had worked long and hard hours to save enough money to retire—money that they were going to use to visit relatives and do what they wanted to do when they had more time to spend together. I must highlight that when this lady went down to her bank, the staff were incredible. It is good to underline it when banks step in and do the right thing. In this case, Santander and Nationwide must be thanked; they were able to track and trace some of the money, and the lady got some 75% of it back. I put on record my thanks to them for what they did.
Clearly, the scammers have upped their game. Their scams do not involve emails from so-called Nigerian princes, kings, and retired army generals, telling people, “You’ve just won all the money in the world, which you never thought you’d have, and you’ve inherited land. All you have to do is send your bank details, and we’ll transfer the money and everything else to you.” It is much more sophisticated today; we now have home-grown, plausible, knowledgeable thieves, able to prey on those who have worked hard and deserve to live their life free from such vile thieves.
I know another lady who was scammed. She is separated and divorced. The person who scammed her was aware of her personal circumstances because she has a Facebook account. Whenever we put something on Facebook, we innocently tell the world where we are. People know whether we are separated or divorced, and when they read that story, they quickly assume that we are vulnerable, which gives them another opportunity for a scam. The scam involved transferring money to a person from eastern Europe or wherever—he certainly sounded English, according to the lady. They had a Facebook arrangement and made telephone calls, but they did not meet. Appointments and liaisons were made, but there was always a reason he could not make it. The signs tell us that something was not right about it. He purported to be serving in the forces, but when the address that he had given was checked out, it was false, as were the details of his Army record. Everything about him was false, but she was vulnerable and innocently lost money to his scam. We need to be careful about that.
My local paper, Newtownards Chronicle, regularly publishes stories to highlight scams, whether online or telephone frauds, as do the police. The scams are on a large scale. HMRC reported that, last spring, it received some 250,000 reports of tax scams—nearly 2,500 a day—and asked for more than 6,000 websites to be deactivated. Some 84,000 customers lost money. About a month or two ago, HMRC warned in the press about people telling others, “Pay your tax by this time”, and some people were caught as a result.
Last year alone, customers lost tens of thousands of pounds, but only a fraction of that amount was refunded by banks. The new code, which we all know about, should mean that more money will be reimbursed. The refund will come from a central pot in cases where neither the bank nor the customer was to blame. Eight banks, covering 17 brands, have committed to implement the code immediately: Barclays; HSBC, including first direct and M&S Bank; Lloyds Bank, including Halifax, Bank of Scotland, and Intelligent Finance; Metro Bank; Nationwide; Royal Bank of Scotland, including NatWest and Ulster Bank in Northern Ireland; Santander, including cahoot and Cater Allen; and Starling Bank.
Not all banks have signed up, however, and that needs to change. In the Minister’s response, which I know will be forthcoming and helpful, perhaps she can give us an idea of what has been done to encourage other banks to sign up and be part of the initiative. We need to drive change and the way forward from this place and from this debate, and I look to the Minister, as I often do, to understand the Government’s plans for the line of action to be taken, legislation, and the methodology to ensure that scams and scammers can be stopped.
What more can we do to tackle the issue? In large part, it needs to be tackled through conversation and coverage. We need to encourage people to have conversations about phone scams with all family members, not simply those whom we believe to be vulnerable, although they also need to be told. It is surprising how many people can be caught out unwittingly. Hon. Members present, and people further afield, may remember the old days when front doors were left open, probably with the key inside. The money was in the wee tin in the kitchen, but it was never touched—that is how it was. Life has moved on. Today, thieves are willing to rob, pillage and steal, and they have different ways of doing it, which we need to understand.
The message must be clear. People should always check with their local branch before they give out any details. They should pop down and ask the staff on the front desk what is happening—or if they do not have a bank to pop down to and ask, as the hon. Member for Westmorland and Lonsdale said, they should certainly phone. The staff can let them know if there is an issue with any of their accounts. A genuine caller will understand and encourage the need to check with the bank.
I usually go on holiday every second year, and we have paid the money this year. As an example of how banks can do it, when the money is paid out from my credit card account, my bank phones me up and says, “This is a larger amount of money than we normally have coming through your bank account. Can you confirm it?” Some banks, and some debit and credit card companies, are proactive, as they should be.
I am not a soap watcher—I do not watch “Coronation Street” or “Emmerdale”, or any of those sorts of things—but my wife is, and millions of other people watch, too. As I understand from my wife, not from my own experience, they do storylines about different issues. There is an opportunity to use some of those soaps to raise awareness by carrying a hacker storyline. That would make more people aware of what is happening throughout the country. We need to understand that it is happening to people of all ages, not simply to the old and infirm; a 20, 25 or 30-year-old can be scammed as well. The hon. Member for Westmorland and Lonsdale referred clearly to young and old.
We need to set aside more funding to enable the police to be more effective in tackling such fraud, as the hon. Member for Ogmore said, and as others will. A business in my constituency caught online fraud while it was taking place, but when it rang its bank and the Police Service of Northern Ireland, they did not have the expertise to stop and trace the fraud. That should not be the case. The necessary expertise, experience and wherewithal must be in place.
The scams that happen in the constituency of the hon. Member for Ogmore or the Minister, or in my constituency or yours, Mr Hollobone, are the same scams that take place all over the United Kingdom. It is important that the police forces in all four regions interact with one another about scams. Perhaps that already happens, but if it does not, it needs to. Every region of the United Kingdom of Great Britain and Northern Ireland needs to exchange information about new scams, so that others know, and so that the knowledge passes down through the system.
We must have experts available to do what needs to be done—not simply to stop transfers midway, but to trace those who are carrying them out and ensure that they get the maximum sentence for their fraud. The sentences for fraud and for stealing from people need to reflect those criminal activities.
The lady about whom I spoke at the beginning of my remarks has been irrevocably changed by the experience; someone who was outgoing and confident has lost trust, not in her bank, but in herself. The effect on people is not just monetary or financial; it is deeper than that. There are long-term mental and emotional effects. We need to ensure that support is available to tackle the crime, catch the criminals, stop the scams and help the victims.
I thank the hon. Member for Ogmore (Chris Elmore) for securing the debate and for his comprehensive exposition of the matter.
The cost of scamming in our society is undoubtedly huge and cannot be counted only in pounds, shillings and pence, although the financial cost is significant. As we have heard, scamming affects all sections of our communities, but the elderly and other vulnerable members of our communities are at particular risk. The Office for National Statistics predicts that by 2030, the number of elderly people living in our communities will increase by 34% from 11.6 million to 15.7 million, and the number of people living with dementia is set to increase from 850,000 to 2.1 million across the UK.
We should not forget that the impact of dementia and other impairments makes vulnerability much more pronounced and the ability to target an individual repeatedly much more possible. The hon. Member for Westmorland and Lonsdale (Tim Farron) discussed the impact of scams, and it is worth noting that victims of scams are nearly two and a half times more likely to require increased care provision or to die within two years of being scammed. It has also been reported that victims often experience a rapid drop in their physical health after realising that they have been scammed.
Those who perpetrate scams use increasingly sophisticated techniques to scam their victims, in some cases repeatedly. Trading standards, although already hard-pressed, is working on the frontline to do all that it can to safeguard the vulnerable. The most sinister, cynical and cruel aspect of scamming is that it is a criminal activity that targets the most vulnerable in their own homes. The one place where any of us should feel safe becomes the setting for people being conned out of their money, via sales scripts, data collection and sometimes even targeted mail.
The most common telephone scams are cold calls. I am delighted that, despite an unnecessary two-year delay, the Government have finally implemented my ten-minute rule Bill on nuisance calls in full, because there is a huge overlap between cold calls and nuisance scams. The adoption of that Bill is a very good start, but more needs to be done.
As the hon. Member for Westmorland and Lonsdale set out, the impact of scams goes far beyond the financial loss. It is emotional and psychological, and has been shown to have an impact on our wellbeing. The hon. Member for Ogmore pointed out that scams can ruin lives and split up families, with the consequences lasting long beyond the initial trauma of financial loss. Moreover, even when financial losses are comparatively low, scams lead to a breakdown in consumer confidence.
The full effects of the harm caused are difficult to estimate, as—alarmingly—only around 5% of victims report that they have lost money. The average age of a victim is 74 years old and the losses average about £1,000, but many lose hundreds of thousands of pounds. Victims of scams often feel embarrassed and are afraid that their families will judge them to be no longer capable of living alone. For that reason, scams may not be reported, which leaves the victims open and vulnerable to repeat scams. Some people find it extremely difficult even to admit that they have been the victim of a crime.
The scale of the problem and its associated costs are huge. Alongside that, we know that trading standards is struggling to cope, although the work it does is worthy of high praise and demands our respect. I also want to highlight the excellent work carried out by the Credit Industry Fraud Avoidance System, which works to prevent fraud and financial crime through the sharing of confirmed fraud data. Last year, CIFAS prevented more than £1 billion in fraud loss by sharing data across sectors. Its data shows that in my constituency of North Ayrshire and Arran, 278 frauds took place last year and there were 103 victims of fraud. That is a mere snapshot of the true level of fraud, which is likely to be much higher because of under-reporting.
Scams do more than rob people of their money. They rob them of their confidence; their belief in themselves and in their judgment; their self-esteem; their willingness to trust people; and the help others may be able to offer them. Ultimately, they rob them of their ability to live full, happy, independent lives. Research carried out by Which? shows that what makes us vulnerable to scams is that we are all overconfident about our ability to spot one. Ironically, that overconfidence makes us all the more vulnerable. The gap between confidence and ability is dangerous.
What can we do? I absolutely agree with the suggestion put forward by trading standards that financial institutions should recognise that clients with dementia are by definition more at risk of being scammed and that measures need to be taken to protect that group as a duty of care—I would argue that it should be a legal duty of care. Those who are diagnosed with dementia live with a cognitive impairment, and that must be recognised as we seek to protect them.
The sharing of personal details and information with other organisations should of course require a clear opt-in, as opposed to an opt-out, which is an important tool in the fight against scamming. The normal default position of charities and other organisations should be that personal details are not passed on or shared. Although there is legislation in place, I am not convinced from the evidence I have seen that it is being as rigorously adhered to as it should be.
It is worth noting that about 850,000 people in the UK currently live with dementia and the figure is expected to rise to more than 1 million by 2025. Sadly, the scammer does not see people who need help and are vulnerable; they simply see rich pickings. It is the duty of society to do all it can to protect these vulnerable, elderly people.
Customers should be able to formally notify their bank in writing if they feel at risk and request that all transactions over a certain amount to new payees have a 24-hour delay before being processed. The hon. Member for Strangford (Jim Shannon) discussed his experience of that, and it is time that all banks had a legal duty to do the same. It would give time for the proposed transaction to be challenged and would potentially stop scammed money from leaving a scam victim’s account.
Of course, it is not just the elderly who can be rich pickings for scamming. In 2015, almost 24,000 people aged under 30 were victims of identity fraud, up from 15,766 in 2014 and more than double the 11,000 victims in that age bracket in 2010. Fraudsters get hold of their victim’s personal information—such as name, date of birth, address, their bank and who they hold accounts with—in a variety of ways, including through hacking and data loss, as well as by using social media to put the pieces of someone’s identity together.
Some 86% of all identity frauds in 2015 were perpetrated online, and that figure is rising. Interesting emerging evidence suggests that younger people report losing money to fraud more often than older people, as scams move online. Older people are more reluctant to report being scammed, but when older people are victims of scams, their losses tend to be much greater.
Society, the Government and industry all have a role in preventing fraud. Our concern is that the lack of awareness about identity fraud is making it even easier for fraudsters to obtain the information they need from social media sites. It is important that we all check our privacy settings today and think twice about what we share on social media.
The hon. Member for Westmorland and Lonsdale talked about the closure of bank branches, which is an important point. There is no doubt that banks are trying to force those of us who have chosen not to bank online—I include myself—to do so, not because it is convenient for us but because it is convenient for the banks. I for one will not bank online and I urge those who are not comfortable doing so to similarly resist that pressure.
We have heard today about some eminently sensible and straightforward measures that could be taken by having a more strategic approach. Banks having safeguards for vulnerable people could do much to protect those who are most at risk of scamming—the elderly and vulnerable in our communities. We should also reach out to those of all ages who use social media but do not have the information they need to protect themselves from identity fraud. We could do more to give people information, with education campaigns to better inform people how they can take some responsibility and some simple steps to protect themselves, as the hon. Member for Strangford suggested.
I urge the Minister to reflect on the suggestions that have been put forward to tackle this problem and to confront the situation whereby people are robbed in their own homes—an experience that they subsequently find deeply scarring. The effects are far-reaching. Let us do more to protect the victims of scams—we can do more. The scammers and fraudsters are very creative; we have heard some examples of that today. They are evolving their techniques. We need to be creative and evolve our measures to deal with them. In the end, we are all at risk, so we need to work together to protect our communities. I am very interested to hear what ideas the Minister is going to take forward.
It is a pleasure to serve under you in the Chair, Mr Hollobone, in the first debate back after the short recess. I pay tribute to my hon. Friend the Member for Ogmore (Chris Elmore) for raising this crucial issue and for his thoughtful and powerful speech, which made a compelling case for greater action by the Government on telephone and other types of scamming.
The scale of this problem is truly breathtaking. Age UK has estimated that up to 5 million people over the age of 65 believe they have been targeted by a scam. South Wales, the part of the country that my hon. Friend and I represent, is a hotspot for these issues. He was right to speak of his local trading standards team and South Wales police. I entirely concur with his comments and support what he says in respect not only of his local authority, but my local authority in Torfaen and Gwent police. There is no doubt that trading standards and other law enforcement agencies would be in a better position to tackle this issue if they had not been subjected to nine years of austerity and spending cuts.
I welcome the work of the joint fraud taskforce, which I look forward to hearing more about from the Minister in due course, and the ban on pension cold-calling that came into effect in January. However, I note that Her Majesty’s inspectorate of constabulary said there was a “disjointed and ineffective” national strategy. Therein lies an enormous challenge for the Government in pulling together so many different aspects of a strategy and enforcing it around the United Kingdom.
The hon. Member for Westmorland and Lonsdale (Tim Farron) spoke powerfully about the cases he has seen in his constituency office, and about a crucial issue that should not be missed in this debate: the future of bank branches. At the last general election, my hon. Friends and I stood on a manifesto that sought to change the framework of legal obligations to be considered when closure decisions come to the fore. Nobody is saying that there are not business cases. Footfall is of course important—nobody is denying that—but there are two things to consider. First, the wider social impact of closing branches is often missed. Secondly, if the current rate of branches disappearing from the high street continues, we will end up with deserts in different parts of the country because there are no branches nearby. The hon. Gentleman represents a very rural constituency where I am sure that would be a particular issue, but it applies across all parts of the country and is something that we really need to tackle.
The hon. Member for Strangford (Jim Shannon) spoke movingly about his constituent, a schoolteacher who clearly fell victim to a fraudster who was extremely credible, as I am afraid they too often are. The hon. Gentleman also highlighted a further issue, which I will come back to in a moment: once someone has fallen victim to a scam, what awareness is there of the remedy and the compensation that can subsequently be recovered? In some cases, it is sadly not.
The hon. Member for North Ayrshire and Arran (Patricia Gibson) was absolutely right to highlight the increasing risk to vulnerable people. When we talk about some of the statistics on scams affecting people over 75—I will do so in a moment—we must not forget that anyone of any age can fall victim to such scams. She was right to point out the risk to young people from different types of online scams, including identity fraud, and the importance of being cautious about what is shared on social media and knowing how that information can be used by people who wish us harm.
In its most recent statistics on crime in England and Wales, the Office for National Statistics identifies a worrying trend in these types of cases. The number of fraud incidents, 3.6 million, was up 12% on the previous survey year, driven in part by a 27% rise in consumer and retail fraud. It is vulnerable people who are targeted. Age UK has identified that single older people are more likely to respond than married people, and half of all people over 75 live alone. In addition to that vulnerability, the people who perpetrate such crimes are becoming more menacing and sophisticated in how they set out to defraud people.
A number of aspects of this issue demonstrate the need for a laser-like focus from the Government. There is the classic lottery scam, where people are told that they have won something when they have not. There are Government scams, where groups essentially pretend to be the Government and use that badge of credibility to carry out their crime. There are also security scams, which were mentioned in earlier speeches, whereby people are contacted by someone pretending to be their bank or some other trusted source.
What are we to do? We have to raise awareness, but it has to be done in a robust, targeted and smart way. People who are victims of scams need to report them, and a number of the speeches picked out that it is often difficult. People perhaps feel embarrassed and do not want to say they have been a victim of this particular type of confidence trick. As my hon. Friend the Member for Ogmore pointed out, that relates to how people are treated when they do speak up, and it is important that best practice on being sensitive to the relevant issues is spread among our police forces.
There are other, practical things that people can do. For example, the Royal Mail can stop unaddressed mailings in the post if people register for that service. There is also the issue of data protection, which is covered by both the Data Protection Act 2018 and the General Data Protection Regulation. The Information Commissioner’s Office, to which I often direct constituents who are worried about what has happened to their data, is an oversight body. If people are concerned about the retention of their data, they should be encouraged to go to that scrutiny body.
The hon. Member for Strangford raised the question of what remedies there are when someone falls victim to one of these confidence tricks. There is the Consumer Credit Act 1974, and people often forget that credit companies are jointly and severally liable even if the breach or misrepresentation is by the person doing the selling. The Act applies only to sums between £100 and £30,000, but that is none the less one remedy. There is debit card chargeback and the authorised push payment voluntary code, to which the hon. Member for Westmorland and Lonsdale referred. I praise the work of consumer groups on raising awareness of those remedies. It is something that we really need to focus on, so that people are aware that should they fall victim and lose substantial amounts of money—one of the cases mentioned in the debate involved around £50,000, which is a huge amount of money—there are routes they can go down to try to recoup at least some of their losses.
There was an excellent Library briefing for this debate, and I pay tribute to the Library staff who produced it. The Government really need to look at how they collect statistics in this area. Where they do collect statistics, is there a way of breaking them down into types of scams? Are they online or telephone scams? I have raised this point with Ministers before, and I appreciate that there is always a balance. They cannot collect every single statistic, but if statistics were collected on what the fastest-growing risk was, the Minister would be more able to target Government policy to reduce it.
It is crucial that we bring together a robust strategy all over the country. We need more resources for our law enforcement agencies, but they also need a consistent strategy that pushes back against the fraudsters who target our constituents. To use the words quoted by my hon. Friend the Member for Ogmore, the victims might not “bang, bleed or shout,” but great misery is certainly caused to them by this crime. The Government have to rise to the challenge.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Ogmore (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 the hon. Member for Strangford (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 the Member for Hastings and Rye (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 14 September this year, rules supplementary to the second payment services directive will apply, meaning that payment service providers such as banks will be required to apply more security measures to large transactions, and customers may be asked to provide more credentials. That could reduce some types of fraud by up to 30%.
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.
I am exceedingly grateful to the hon. Members for Westmorland and Lonsdale (Tim Farron) and for Strangford (Jim Shannon) for their contributions, as well as to the SNP spokesperson and the shadow Minister. I thank the Minister for stepping in for the Security Minister. I do not doubt for one second hers or the Security Minister’s sincerity in trying to tackle what should be a cross-party issue. No one wants to see constituents defrauded in any way. Certainly, I know that we all want to work constructively to resolve those issues. In the Minister’s typical style, it was refreshing of her to acknowledge that problems still need to be resolved, but that she is trying to do her bit within her portfolio, while encouraging other Home Office Ministers to find a way forward.
I sincerely believe that there is more to be done, and I hope to continue—over my next 18 months as an MP and in future—raising the profile of this issue, working with Ministers and those on the Opposition Front Bench, to ensure that we have robust processes in place to protect our constituents and get ahead of the scammers, rather than what feels like forever catching up with them.
Question put and agreed to.
That this House has considered telephone and online scams.