Consumer Protection (Postal Marketing)

Caroline Nokes Excerpts

Wednesday 19th January 2011 Commons Chamber

[Caroline Nokes (Romsey and Southampton North) (Con)]

I beg to move,

That leave be given to bring in a Bill to make provision relating to the regulation of postal marketing; and for connected purposes.

I am grateful for the opportunity to raise such an important but sometimes under-reported matter. Every day, criminals worldwide send millions of unsolicited, mass-marketed letters to UK residents. As defined by the Office of Fair Trading, a mass-marketed scam is:

“A misleading or deceptive business practice where you receive an unsolicited or uninvited contact and false promises are made to con you out of your money”.

Although I appreciate that many such contacts might arrive by e-mail or telephone, I wish to focus today on those that use Royal Mail to deliver their message to potential victims. Consumers losing money in that way is a significant problem in the UK. Those activities are often targeted specifically at vulnerable or disadvantaged consumers, such as the elderly and those already in debt, and those individuals can suffer disproportionate levels of harm as a result. Although anyone can fall for a scam, the elderly and vulnerable are more likely to be targeted and to become repeat victims.

Members might be aware of the Nigerian 419 scam, which involves a letter asking the recipients to help in removing a substantial sum of money from Africa using their bank account, for which they will receive a smaller amount in return for their assistance. Inevitably, the money never arrives and the recipient will find that their bank account has been used fraudulently and, in some cases, that their identity has been stolen and cloned. That is one of the most popular and recognisable scams, but others involve fake lotteries, even clairvoyants and fictitious prize draws. After replying to the first “taster” letter, the victim’s details will be sold to other criminal networks and the deluge of mailings will begin.

Across the UK, postal workers deliver more than 100 pieces of mail every day to some victims, but there is no comprehensive system in place to report such activity. Nearly half of the UK adult population has been targeted in that way, and while it is easy for us to advise them to delete the e-mail, hang up the telephone or simply tear up the mailing, more than 3 million adults—6.5% of the UK population—will be taken in, losing a total of £3.5 billion every year. Should one have the misfortune to become a victim once, it will only get worse. Chronic victims have their names added to a so-called “suckers” list and will find the number of mailings increase exponentially as their details are sold on again and again.

We should not underestimate the effect that such mailings have. Scam mail is designed to shut down the normal thought process and dazzle the mind. Chronic victims can focus only on the fictitious prize, not on the money that they are sending to claim it. Many will not understand modern technology and how it allows mass mail to be easily produced, despite looking like important and personally addressed correspondence. They might fall out with their families, who are desperate to help their relatives stop what can become an addiction but cannot make them understand that sending yet more money will not make a fictitious prize appear. It is also worth noting that the Mailing Preference Service can help only if victims themselves come to understand that there is a problem and register with it. One of the biggest difficulties is in helping the victim realise that the offers are not genuine.

Scam mail should not be confused with perfectly legitimate direct marketing. Indeed, I seek to assure Members that I have no desire to prevent either legitimate businesses from communicating with potential customers, or Members from using direct mail to communicate with constituents. It is a complex area, because in seeking to afford greater protection to vulnerable constituents I do not wish to advocate measures that are excessive and cross the line between consumer protection and civil liberty.

Currently the principal protection comes from the Consumer Protection from Unfair Trading Regulations 2008 and the Fraud Act 2006. The former contains both criminal offences and the option to take injunctive action using the Enterprise Act 2002. Both can be used with a degree of success to deal with scams originating in the UK, but normally only once they are in full operation and vulnerable people have already suffered. Those originating in the European Union can be tackled using cross-border injunctive action procedures under the 2002 Act, but that is time-consuming, costly and rarely used. When scams originate from a country outside the EU, it is down to the authorities in that country to take action against the perpetrators. The level of co-operation will obviously vary from country to country and is fraught with difficulty. I have met Hampshire trading standards, which has been proactive in tackling the problem—[Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the hon. Lady. It is only courteous to allow the hon. Lady to be heard with a degree of quiet and respect.

[Caroline Nokes]

Hampshire trading standards has made some constructive suggestions on the changes that it thinks would be possible. The police are also well aware of how and where scam mail enters the country, but they are currently unable to stop it. As I have mentioned, those who know best how to identify victims are postal workers. Many know their rounds and residents extremely well and can quickly identify when patterns of mass-marketed mail deliveries change and increase. Consequently, Hampshire trading standards is asking for measures to be introduced to enable the police, customs officers or the National Fraud Authority to identify and intercept scam mail when it enters the country, and to allow Royal Mail to disclose the details of potential victims to their local trading standards service, so that support can be offered to those financially abused and vulnerable people. One significant difficulty faced by Royal Mail is that passing on consumer details contravenes the Data Protection Act 1998. As I mentioned earlier, there might also be a conflict with human rights legislation, but even though it is a difficult process, it does not mean that we should not try.

The proposal to allow the police or other enforcement officers to intercept mail is a very difficult one, requiring changes to both the Postal Services Act 2000 and the Regulation of Investigatory Powers Act 2000. Under current law, the police need to apply to the Secretary of State for a warrant under RIPA and the Police Act 1997 in order to intercept and open a postal packet lawfully in the course of its transmission.

I do not suggest for one moment that there should be a blanket power to intercept mail without a warrant, but such mail is easy to identify, the same victims are being targeted hundreds and hundreds of times over and it ought not to be impossible to introduce appropriate safeguards against breaches of human rights, controlled using the RIPA authorisation process at a sufficiently high level, while ensuring that the tests of necessity and proportionality are satisfied.

There is some disagreement between trading standards authorities and the Royal Mail about whether the disclosure of victims’ details is permitted under section 29 of the 1998 Act. There is no disagreement about whether postal workers are best placed to identify the victims. Indeed, they want to help. It might be appropriate, therefore, to introduce an amendment to the Postal Services Act to provide a legal gateway for the release of such information.

In a trial in Hampshire, the Royal Mail has worked closely with Hampshire trading standards to identify potential victims and to introduce a card that postmen and women can put through the doors of those whom they believe are being targeted, encouraging them to contact trading standards and to seek assistance. Of 44 cards delivered, however, only five victims came forward, suggesting that many people are not being given the support to tackle the problem that they face.

When I visited trading standards, I heard horrendous tales of victims’ houses, stuffed full of scam mail, with many thousands of pieces of paper stacked up in their living rooms; relatives in despair because they could not help their loved ones understand that the offers and promises were not genuine; and examples of Hampshire residents having lost more than £100,000.

This is a timely proposal. Next month is the Office of Fair Trading’s scam awareness month, which seeks to highlight and tackle the extent of that fraudulent activity. This proposal represents a proportionate approach and recognises the need to support the victims of such activities, who have suffered considerable financial loss and distress. I commend it to the House.

Question put and agreed to.

Ordered,

That Caroline Nokes, Lorraine Fullbrook, Simon Hart, Caroline Dinenage, Simon Kirby, Justin Tomlinson, Andrew Bingham, Nick de Bois, Jack Lopresti, Rebecca Harris and Mike Weatherley present the Bill.

Caroline Nokes accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 17 June, and to be printed (Bill 134).