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Banks: Forgery

Volume 823: debated on Thursday 30 June 2022


Asked by

To ask Her Majesty’s Government, further to the letters from the Chair of the House of Commons Treasury Committee to the Financial Conduct Authority and the National Economic Crime Centre on 15 October 2020, how many banks have been (1) investigated, and (2) prosecuted, for forging customer signatures.

My Lords, the National Economic Crime Centre continues to assess the material submitted to it in relation to alleged signatory fraud by banks, as well as information obtained following preliminary inquiries to clarify matters with certain members of the public who raised the issue. The National Economic Crime Centre is making a thorough assessment to determine whether there are grounds for a criminal investigation.

My Lords, I am not really satisfied with the Minister’s reply. Banks have forged customers’ signatures and fabricated evidence on an industrial scale in order to repossess people’s homes and businesses. More than 700 crime reports and 26 lever-arch files of evidence have been submitted to the NECC over the last three years and there has still been no action, as the Minister said. I ask him if he will, first, appoint an independent inquiry into this obfuscation and, secondly, meet me and a delegation of the victims to hear their concerns.

My Lords, that characterisation of the situation is not entirely fair. The NECC is reviewing the evidence submitted to it by the campaign groups. We cannot comment further at this stage, recognising the NECC’s operational independence. Once it has finished its review, it will communicate its findings. The noble Lord referred to the 26 lever-arch files; these actually contain 10,000 pages of evidence in seven staggered submissions, the last set of which was delivered in March 2021. This was subsequently referred to the various subject-matter experts at the SFO and the FCA. These are complex matters and they take time.

My Lords, in the case of Lynch v Cadwallader & Anor in February 2021, the High Court ruled that Aldermore, a bank, cannot enforce a personal guarantee to cover £1.2 million against a businessman because the signature on the document was not his. The court said that it was signed by a “person at the Bank”. Could the Minister explain why this did not trigger any investigation or prosecutions?

I am afraid that I cannot; I am not familiar with the case. As I said, we maintain that the NECC should have operational independence, so I am afraid that I cannot enlighten the noble Baroness any further. I neglected to answer the noble Lord’s request for a meeting; there have been a number of meetings with Home Office officials, but I would of course be happy to meet him.

My Lords, is it the case that the Government are on the side of fat-cat bankers rather than customers? Would it not be a good idea to give more resources to the police so that they can actually investigate, prosecute and bring to justice these people?

My Lords, I am glad that the noble Lord has raised the subject of resources, because we are giving them: the spending review last year allocated a further £400 million to tackle economic crime over the next three years. This includes £100 million earmarked specifically to target fraud, including by establishing a national fraud policing network, including greater fraud investigative capacity in the NCA, meeting a manifesto commitment to create a new national cybercrime force focused on fraud. In addition, new fraud investigation teams have been piloted in four regional organised crime units, which will be expanded and rolled out across all ROCUs. These new capabilities are driven by a new tasking and co-ordination process run by the NECC. Finally, as part of the police uplift, we are prioritising more investigators for the City of London Police, which leads on this.

My Lords, the Minister was quite rightly concerned about operational independence in an earlier answer. In that light, is it really appropriate that Lloyds Bank, one of the suspect banks, has directly funded the City of London Police to the tune of £1.5 million since 2019?

My Lords, the noble Baroness is referring to Action Fraud, which is receiving some funding—but the money is ring-fenced from another source. I cannot find the precise reference to it now, but I will write to her with the details. However, it is not from Lloyds Bank directly.

My Lords, what additional action have the Government taken since the noble Lord, Lord Agnew, resigned, saying that he could no longer defend the Government’s action on fraud?

My Lords, that was a completely different case, of course. But we are doing a number of things, as the noble Lord, Lord Foulkes, will be aware. Some of this is legislative and some of it is to do with the various taskforces and strategies that I highlighted to some extent earlier. A Joint Fraud Taskforce was set up in October 2021.

My Lords, lack of prosecution is a theme today. So much crime has moved online; what we have heard about in this Question is an example of how that has happened. Can we increase the resources for the police and prosecution in respect of digital fraud? My own experience of Action Fraud—admittedly some time ago—was that it was absolutely pathetic.

My Lords, my noble friend is right to raise the changing nature of some of these crimes. I am sure that she is partly referring to the UKFI report on fraud, published earlier this week, which showed that some types of fraud are in fact diminishing while others are increasing. A number of actions are being taken: for example, I am sure that noble Lords were surprised to note that the text messages that we used to receive seem to have diminished somewhat, which is partly a response to work done by the telecoms companies. The National Cyber Security Centre has also launched its suspicious email reporting service to remove harmful scams from online. Since April 2020, it has taken down 81,000 scams across 147,000 URLs.

My Lords, there is active concern about not just fraud but money laundering and large-scale bribery—money laundering not only from former socialist states such as Russia but from the Middle East, and bribery also in terms of a number of the Middle East autocracies. This does not seem to be a priority for the Government yet. Is this also where we need a considerable reinforcement of officials who deal with these subjects?

My Lords, I do not think it is just about officials; it is also about legislation. Obviously, we passed one Act earlier this year at speed. The noble Lord will be aware that there is another economic crime and corporate transparency Bill on its way which deals with many of the unresolved issues from those debates and that Act.

My Lords, yesterday’s Times newspaper reported that money lost to scams had risen by more than £160 million in a year, from £420 million to £583 million, which is a huge increase. Can the Minister say when we might expect the financial services and markets Bill to come before Parliament and whether that Bill will be directed to tackling fraud?

My Lords, as one of those who drafted, or helped to draft, the anti-money laundering directives in Brussels—I emphasise that they were directives—I nevertheless have certain concerns about the way in which the Financial Conduct Authority has interpreted them, in particular the parts that offered proportionality in the application of regulation. A lot of small investors have suffered as a result of an overzealousness of the banking institutions sometimes to do things they do not need to do and to inquire in ways they do not need to inquire. Does my noble friend agree that proportionality should be deployed properly by the Financial Conduct Authority?

I agree with my noble friend. We are straying away from the Home Office brief on this subject. Obviously, the Financial Services Act 2012 established the FCA as the conduct of business regulator for financial services. It has a focused set of objectives to promote effective competition in the interests of consumers, to secure an appropriate degree of protection for consumers and to protect and enhance the integrity of the UK financial system, but I absolutely agree that proportionality has to be a part of that.

My Lords, as I am sure the Minister will know, in May 2019 Dame Elizabeth Gloster was appointed to investigate the collapse of London Capital & Finance and published a damning report in November 2021. Blackmore Bond is also about mini-bonds and poor regulation, yet no investigator has been appointed. Can the Minister explain why this is the case?

I am afraid that I have to refer the noble Lord back to my earlier answer about the operational independence of the NECC. I do not know what the evidential situation is. How can I possibly answer the question?