Scam Mailing

George Hollingbery Excerpts

Wednesday 30th January 2013 Westminster Hall

[Heather Wheeler]

The hon. Lady is of course right. If she would like to apply for a Westminster Hall debate on that issue, I would gladly support her. I think the internet may be one byte too many for my 25-minute speech, but I am sure that the Minister, with her breadth of knowledge, will come on to that.

One Bill to amend the three relevant Acts could cover the issue. There is no doubt which organisation is best placed to detect scam marketing—Royal Mail, which says that scam mail is easy to identify both before and when the scam takes place. It wants to be able to pass on the details of suspected victims to trading standards, but its staff feel duty bound, even while observing the scams happening, to observe the Data Protection Act 1998, the Postal Services Act 2000 and the Regulation of Investigatory Powers Act 2000, and not intervene and report the names and addresses of those they believe are being scammed. Those three Acts place obligations on the Royal Mail that, although well intentioned, often run contrary to the detection and prevention of fraud.

The seemingly simple approach of Royal Mail reporting suspicious mail to trading standards officers is particularly hampered because there is some disagreement as to whether disclosure of the victim’s details by Royal Mail is permissible under section 29 of the Data Protection Act 1998. The legal advice received by trading standards is that disclosure of potential scam victims’ details by the Royal Mail is already permitted under section 29 of the Data Protection Act 1998, which says that information can be released if it is in connection with

“the prevention or detection of crime”

or

“the apprehension or prosecution of offenders”.

However, the legal advice obtained by Royal Mail itself contradicts that view, which reminds me of a friend’s quip that if someone asks 10 lawyers a question they will get 20 different answers.

Royal Mail states that it would be a breach of the Data Protection Act 1998 to release details of suspected victims to a trading standards officer, and therefore it does not do so. Consequently, there is complete confusion about what powers Royal Mail has to report suspected scams to the body that is best placed to investigate. However, a Bill could be brought forward to introduce an amendment to the Postal Services Act 2000 and to the Data Protection Act 1998, in order to provide a legal gateway for the release of that information and for Parliament to enable Royal Mail to act against scam mail.

That brings me to the third issue, which is enhanced powers of interception. At the moment, in order to intercept and report scam mail, the Royal Mail, the police or those officials seeking to investigate scams or enforce existing legislation must secure a warrant from my right hon. Friend the Home Secretary to intercept post in the course of its transmission. To issue a warrant, my right hon. Friend the Home Secretary would need to be satisfied that it was necessary for the purposes of detecting serious crime, which would need substantial proof. That is understandable given the need to protect privacy, data and even human rights. However, the almost sacrosanct nature that post in transmission enjoys is also a charter for the scammer to carry on defrauding.

Like the legislative patchwork quilt, that burdensome approach is well intentioned but it also works against consumer interests. Again, it could be tackled by an Act of Parliament that gives new powers of interception. However, enhancing powers of interception naturally raises questions about protection of privacy and data. If interception powers were to be introduced without the need for a warrant, there would have to be appropriate safeguards against breaches of human rights. Such powers would need to be controlled using the existing authorisation process, but perhaps with the final power of decision resting at a sufficiently high level to ensure that the tests of necessity and proportionality are satisfied, without needing to trouble my right hon. Friend the Home Secretary. After all, should she not be dealing with matters of national security, defeating terrorism and managing our law enforcement agencies?

[George Hollingbery (Meon Valley) (Con)]

Hear, hear.

[Heather Wheeler]

Exactly; I thank my hon. Friend for that. As I was saying, should my right hon. Friend the Home Secretary not be dealing with matters of national security rather than being asked if a postal worker can report the name and address of someone who he or she has genuine reason to believe is a victim of scam mail?

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[George Hollingbery (Meon Valley) (Con)]

It is a pleasure to serve under your chairmanship, Mr Sheridan. I congratulate my hon. Friend the Member for South Derbyshire (Heather Wheeler) on securing the debate. I have worked closely with her on a number of issues, and we sat together on the Communities and Local Government Committee. She is a passionate defender of her constituents’ interests. I readily admit that my expertise in this area is not the same as hers, and I certainly will not go into the issues in such depth, but a number of my constituents have been hit by mail scams and it is important to attempt to do something about them.

According to Office of Fair Trading research, 48% of the UK population has been targeted, and 3.2 million people fall victim to scam mailings every year, particularly the most vulnerable in our society.

[Andrew Bingham (High Peak) (Con)]

I congratulate my hon. Friend the Member for South Derbyshire (Heather Wheeler) on securing this important debate. Does my hon. Friend the Member for Meon Valley (George Hollingbery) agree that it is often the elderly who are targeted and victimised by the scams? There are many different forms of what I call snail mail marketing, and the scams get lost in the middle of that. They are well hidden, and in my experience the elderly are particularly vulnerable.

[George Hollingbery]

That is plainly the case. In my experience, and my hon. Friend the Member for South Derbyshire also made this clear, it tends to be the older and less mentally robust who are scammed and are subjected to repeat versions of the same thing. Their names get on a list and they are targeted again and again.

The estimated annual cost of scam mailings to the economy is some £3.5 billion. The citizens advice bureau in Bishop’s Waltham in my constituency has brought a number of such scams to my attention, and one of them, involving missed delivery cards, caught my eye. The scam is not of the same nature as one that says, “You will send in a cheque,” or one that asks someone to send money directly back. This one is allegedly from a well-known delivery company, and it asks people to confirm that they want the delivery to be remade by calling a particular number. On the card, rather than an address from which to pick up the parcel, there is a telephone number. It turns out to be a premium rate number of a telephone company in Belize, which someone would be charged £315 for the pleasure of calling. Many of the scams are so sophisticated that they are extremely easy to fall for, especially for someone who does not get out or read the newspapers often and is not aware that such things exist. That case highlights one of the biggest challenges in stopping mail scams: the majority originate abroad, and it is nigh on impossible to prosecute or stop them as there is no UK-based business to have a go at.

There is a great deal of work taking place. Hampshire county council has concentrated on the matter, hence the involvement of my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes). The council has established a special trading standards safeguarding unit, which works closely with its partner agencies to help protect vulnerable adults, provide flexible support to victims of fraud and raise awareness through information designed to educate, support and guard against further financial abuse. It has raised awareness through working closely with the media and community groups, and by drafting articles for newsletters, newspapers and generally circulated public communications. Extra training has been given to all staff in adult services and other agencies so that, for example, when staff visit a home and are greeted with a mountain of post they can consider whether the person there might be the victim of scam mailing.

Working in that way has enabled Hampshire county council and adult services to identify several chronic scam victims. This is not something that only Royal Mail or the Government can deal with; local authorities can have a positive input. The council also works closely with a local business that provides a mail and package forwarding service to consumers and businesses outside the UK. The business raised concerns with trading standards after large amounts of mail were returned to it undelivered. With that help, more than 200 envelopes full of cash and cheques from the US were discovered, which helped to end an American mailing scam. Hampshire trading standards has a good working relationship with money supply bureaux, and it highlights concerns about individuals who regularly make overseas transfers to unknown individuals or organisations. There is by no means a single point of contact or a single solution; many different hands can get involved.

I absolutely believe that the Government take the matter seriously. The Prime Minister answered a question during Prime Minister’s Question Time from my hon. Friend the Member for Romsey and Southampton North on, I think, 11 November, and he has announced a series of changes designed to get to grips with the problem. The Office of Fair Trading has invested £7.5 million to create scambuster teams and run awareness campaigns, and the Government are also in the process of creating a dedicated team within the National Crime Agency, when it is established, aimed at tackling the problem. The work is therefore ongoing, but I believe we have a responsibility to look even more closely at the matter and consider whether there is anything more that we can do to target the problem.

My hon. Friend the Member for South Derbyshire has covered many of the solutions that Hampshire county council would like to employ, but let me repeat them anyway. The council believes that we need additional protections in law to help to safeguard potential victims, and my hon. Friend the Member for Romsey and Southampton North introduced a private Member’s Bill in January 2011, which unfortunately ran out of time. For colleagues who have not seen that Bill, she argued that the police, customs officers or the National Fraud Authority should be able to intercept mail if they believe it is scam mail. The county council also believes that Royal Mail should disclose the details of potential scam victims to trading standards so that proper support can be offered to financially abused and vulnerable people.

Further questions arise: how do we stop scam mailing and not direct marketing? Can the issue more effectively be tackled by changes made by Royal Mail rather than the Government? Are there data protection issues that need to be considered? Are changes in the law required? I wonder whether it is possible to beef up the existing mail preference service, or whether Royal Mail can improve its safeguards to address the problem better. A moment or two ago, it occurred to me that it might be possible for families and/or vulnerable adults to have some sort of opt-in system, so that they give permission for their mail to be examined. That might be one of the easiest ways forward, to have a permissive regime under which potential scam victims can say, “I don’t mind my mail being looked at.”

I appreciate that this is a tough issue and one that is very difficult to resolve, but I do have some questions for the Minister. Is there a lead person in Government who is pulling together the key actions designed to address the problem better? Is the Government’s view that it is Royal Mail that needs to put a renewed emphasis on reducing the problem, or is it essentially a Home Office issue? How do we stop the problem falling between two stools in government? If there is not one person with whom responsibility sits, we run the risk of the issue being forgotten about and its dropping through the cracks in the floor.

I appreciate that this is strictly outside the Minister’s portfolio, but when the Prime Minister spoke to my hon. Friend the Member for Romsey and Southampton North about the issue back in November, he said that a team was being created at the National Crime Agency to deal with it. Is the Minister able to update us on the plans to create that dedicated team? I understand that it is not directly within her portfolio, but if she has any news I would gratefully receive it. What I do know for sure is that the message needs to go out loud and clear that scamming vulnerable people for cash is deeply cruel. There is more that we can and must do about it, and we must do it soon.

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[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

It is a delight to serve under your chairmanship Mr Sheridan, and to respond to this debate on an important issue that has been well highlighted by my hon. Friend the Member for South Derbyshire (Heather Wheeler). I congratulate her not only on securing this debate but on how eloquently she has taken up the issue, prompted by the appalling experiences of her constituent, Mrs Smith.

It is worth recognising the great campaigning work done on the issue by a range of individuals, including the hon. Member for Romsey and Southampton North (Caroline Nokes), and organisations such as Age UK, Citizens Advice and the Think Jessica campaign. It is hugely important for raising awareness, a matter that I will address shortly. I agree with the hon. Member for Edinburgh South (Ian Murray) that it is an important part of tackling the problem.

Although we are mainly discussing postal scams, it is important to recognise that scams operate in a range of different ways, and that the people perpetrating such scams do not necessarily stick exclusively with one particular avenue. The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) mentioned internet scams, which as e-mail users we are all familiar with. Premium telephone line prize scams have also been a great cause for concern, although the latter have at least decreased slightly in number since the new guidance from the Independent Committee for the Supervision of Standards of Telephone Information Services was put in place.

It is important to recognise, as the hon. Member for South Derbyshire did when introducing this debate, that the vast majority of direct mail delivered to our doors is legitimate advertising material. The industry is important to the economy, generating about £16 billion in sales each year, and is a linchpin of the postal service model in this country. We would not want to jeopardise that industry, as it ensures that we have a universal postal service and that we do not pay prohibitively expensive prices when we go to post a letter. I will come to preference services, as they are important, but the real villains of this case are the fraudsters. Their goal is simple: to cheat as many people as possible out of their money by making false promises.

It is worth noting that we are all potential victims. About 3.2 million people a year are victims of such scams, and the losses incurred total about £3.5 billion. Various Members have stated that it is particularly an issue for the vulnerable and elderly. We want to ensure that we protect such individuals, but it is easy to fall into a slightly superior sense that it could not happen to us: “I am a very savvy consumer, and this would never happen to me; it’s something that only happens to vulnerable elderly people.” I was certainly surprised to find when I looked at the research that the age group most likely to fall victim to postal scams is not elderly people—over-65s make up 13% of victims—but people between the ages of 35 and 44. More than a quarter of scams affect people in that age group. It is worth bearing that in mind.

We are discussing scams that are often cleverly customised. Some involve the prospect of a tax rebate, and are often sent around the time at which tax deadlines approach. Some use information about individuals to imitate interactions with banks of which they might be customers. That is how the perpetrators of such horrible crimes try to dupe people out of their money. It is true, however, that older victims tend to lose more money—about £1,200 per scam, almost double other age groups—so we must ensure that everyone is protected.

I was interested in the different types of scam. The most common are bogus holiday clubs, then high-risk investments, which are little more than pyramid or chain-letter scams. Foreign lottery scams also lead to £260 million in losses, whereas the figure for bogus holiday clubs is about £1.17 billion. A range of different scams exist.

The hon. Member for Edinburgh South discussed awareness of the issue, which is crucial. A variety of organisations, from the Office of Fair Trading to the Trading Standards Institute and Citizens Advice, try to get the message out so that people are aware of the problem. As my hon. Friend the Member for Ceredigion (Mr Williams) said and many Members in this debate have repeated—it is a good mantra—if it sounds too good to be true, it probably is. We must have a healthy scepticism about things that come to us through the post, via e-mail, over the telephone or by other methods, and ensure that people know what sort of thing to watch out for.

Age UK has produced a helpful checklist of things to consider. Was the offer unsolicited? Is it necessary to respond quickly? Why the rush? Is it necessary to pay for a prize or free gift, or ring a premium rate number that starts with 09? Are recipients being asked for any bank or credit card details? Is the business reluctant to give its address or contact details? Is the recipient being asked to keep it confidential or secret? Those are all healthy questions to ask. It is not just parts of Government, independent agencies or charities that have a role to play in raising awareness; all of us as Members can do our bit in our constituencies as well.

Beyond awareness, enforcement is clearly a key part of the action that the Government can take. In 2010, the National Fraud Authority produced a comprehensive strategy to confront mass marketing fraud, which includes postal scams and other types of fraud. The strategy was set up under the banner of Action Fraud, and the Metropolitan police and the NFA have been working on it with a range of partners—from local government to central Government bodies and stakeholder groups—to build a cohesive response to tackling postal scams. That includes engaging with Royal Mail and other postal operators and mailing operations. Royal Mail is aware that the nature of the service that it provides—universal access to all users—makes it vulnerable to being used for scams. In recognition of that, Royal Mail is working with the police and other enforcement bodies to prevent scam mail from getting into the system at the beginning of the process. I will return to that point later.

A public trigger is also important. If people suspect a scam, they should be able to do something to trigger a response. That is why awareness will always be important. The first step in stopping a scam is knowing what a scam looks like, but it is not always straightforward, as I have said. There is a range of advice on scams and clear and practical guidance to consumers about what they can do, and I will outline some of what is available.

If someone thinks that they have been the victim of a scam or would like to know how to advise a loved one who might be the victim of a scam, the Citizens Advice consumer helpline is a good first port of call. It is open during office hours on 0845 404 0506, and it gives consumers clear, practical advice on what to do. Action Fraud is the place to go to report the scams; its website is actionfraud.police.uk and its telephone line is 0300 123 2040. The process is simple and quick. If people are worried, they can go online or telephone and quickly make a report, then the appropriate authority will be alerted so that it can take action. It might not happen overnight, but action will be pursued.

Trading standards can take action locally or it can refer matters to national and international enforcement bodies, if required, depending on the nature of the scam that has been uncovered. Trading standards services and Scambusters can investigate scams under the Consumer Protection from Unfair Trading Regulations 2008, which carry criminal sanctions.

The hon. Member for Edinburgh South mentioned Scambusters and what the Government are doing. In respect of the consumer landscape changes, we are giving trading standards greater responsibility for consumer law enforcement, by transferring central Government funding to co-ordinate enforcement activity from the OFT to the new National Trading Standards Board. He rightly highlighted the success of Scambusters, mentioning figures for what it has done in the six years from 2006 to March 2012. It may be helpful for colleagues if I say that, since 2012, that work has continued and is now being co-ordinated more centrally as a result of that more national approach. The National Trading Standards Board is now responsible for the Scambusters teams and has matched previous funding levels, which is important recognition of how vital we think this issue is, particularly in the context of difficult economic circumstances. That central co-ordination will continue in 2013. I hope that I have provided hon. Members with some reassurance.

The snappily titled strategic intelligence, prevention and enforcement partnership, despite being in need of a new name, co-ordinates nationally between trading standards and the National Trading Standards Board and liaises over the border into Scotland, with the Convention of Scottish Local Authorities and agencies there, and co-ordinates with external stakeholder organisations. It is also heavily involved in other activities, particularly in considering whether consumer or business education and awareness campaigns might be able to deal with some of the detriment caused.

Various ideas have been advanced in the debate about what could be done to tackle these scams. It was either the hon. Member for Meon Valley (George Hollingbery) or the hon. Member for High Peak (Andrew Bingham) who suggested an opt-in system, whereby people could say, “I’m worried about this. Can I opt in to extra help?” There is merit in thinking about that idea, but it relies on the individual recognising that there is a problem and wanting support. The hon. Member for South Derbyshire discussed scenarios involving vulnerable people who do not realise what is going on and will not be open to such action. That said, it is worth setting out what people can do if they are worried about this, and worth doing for the many who have not, thankfully, been victims of a scam and do not want to be.

The hon. Member for Edinburgh South mentioned things that people can do. I should like to elaborate on that. The Direct Marketing Association has two different opt-out mechanisms. The hon. Gentleman mentioned the mailing preference service, under which people can sign up to opt out of addressed direct mail, but rightly made the point that that does not include unaddressed direct mail. However, that association has a second service, which is called “Your Choice”, through which people can opt out of unaddressed direct mail. It has both services because some people might be happy to receive one type but not the other, so people have that option. Details of those opt-out schemes are available at dma.org.uk. The Royal Mail opt-out, which the hon. Gentleman mentioned, stops about a quarter of unaddressed direct mail delivered by Royal Mail directly through its bulk mailing system, although that does not apply to other items in the postal system.

If people sign up to all three mechanisms, that will generally stop about 95% of direct mail. Of course, if people are freely breaking the law and trying to scam innocent people out of money, they are probably not going to be too bothered about following the rules of the mailing preference service. However, the point was rightly made that, if much less direct mail is coming in, it may be easier to spot something that is fraudulent or a scam. These services can give people a little bit more peace of mind. I recommend that individuals who would like an opt-in mechanism take that action.

There is a desire in some quarters for legislation as a solution—the hon. Member for Romsey and Southampton North has introduced a private Member’s Bill, and the hon. Member for South Derbyshire mentioned legislation—which I understand. However, there are significant drawbacks in reaching for such a solution. On the legal point, amending the Postal Services Act 2000 would not create the effect sought by the proponents of this approach, because the rules on not intercepting the post are contained not just in that Act; they are also in the Police Act 1997 and the Regulation of Investigatory Powers Act 2000, both of which, for good reason, limit intercepts and set down the process for which warrants are required. A simple amendment to the Postal Services Act would not achieve the aim, and if those other Acts were amended the unintended consequences would be significant.

There are consequences relating to privacy of individuals who want their mail to be delivered without it being opened by somebody else: I think that is the vast majority of people. I do not like to say it would be using a sledgehammer to crack a nut, because this is a significant problem, but given the total number of items going through the mail—60 million items a day through Royal Mail, for example, making 21.9 billion a year—and even taking into account the 3 million people a year who are victims, trying to identify which items are causing the problems is like looking for a needle in a haystack. They do not have a big stamp on the front of the envelope saying, “This is scam mail”.

[George Hollingbery]

The Minister mentioned my opt-in suggestion. My thinking was that there could be an option for people to sign into, such that their mail could be intercepted by their local post office worker. We have heard about postal workers’ frustration about not being able to get involved. If somebody could opt in, giving a postal worker the right to intercept at the door, there might be some scope for that.

[Jo Swinson]

I thank the hon. Gentleman for his suggestion. I will mention Royal Mail’s response and what we could do to enhance that.

Volume is just one issue that we face. It is not easy to tell which letters are scam mail, because they can arrive in plain envelopes. Indeed, the people designing scams try to stay one step ahead of any regime.