Scam Mailing

Heather Wheeler Excerpts

Wednesday 30th January 2013 Westminster Hall

[Heather Wheeler (South Derbyshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Sheridan. I thank Mr Speaker for allowing us the opportunity of having this debate on scam mail and postal fraud, which impacts on the lives of hundreds of thousands of the country’s most vulnerable people. The elderly and those in debt are among those who are deliberately targeted by fraudsters because they are seen as a soft target and easy to con.

I pay tribute to my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) who has been championing the issue for some time. If her ten-minute rule Bill had received Royal Assent, it would have gone a considerable way to eradicating the issue, by empowering the Royal Mail to take definitive action against those engaging in postal fraud. Regrettably, she is on parliamentary business elsewhere and cannot attend this debate. None the less, I am deeply grateful to her for the input and support of her office.

Let me outline the nature and scale of the problem before making some suggestions as to how the issue might be easily resolved. For the avoidance of doubt, when I use the words “scam mail” I am not talking about the perfectly legal mail shots that legitimate companies send out to advertise lawful services or the sale of genuine goods.

I wish to focus on mail shots which are sent for the sole intention of obtaining money through deception—fraud. Such scams include fake lotteries, fake lawyers promising transfers of large sums of cash, so-called boiler-room share purchasing scams, and even threats of curses put on recipients if they do not send back money to the originators. The scams have many different guises, but, none the less, end up with vulnerable people parting with their cash.

The scale of this largely unreported problem is vast, costing some £3.5 billion a year and growing. Some 50% of the population will be targeted, and nearly 7% will be duped by scam mail, which is carefully crafted to maximise the potential of deceiving the victim. Once the scam comes to light, the victim or, in many cases, the victim’s family, experience a large range of emotions, including anger, shame and upset. In some cases where the loss has been so big, they might even have suicidal thoughts. Indeed, as we heard on the television today, there were five suicides as a result of this matter last year alone.

Sadly, the experience of my constituent Mrs Smith is like that of many others. Her father, a former Gurkha, spends a considerable amount of his weekly pension on these scams. He looks on the payments as his “investments”. He lives in total denial, but believes unwaveringly that one day one of these investments will pay off. He has even told friends and bank managers that his investments abroad are about to mature. Of course Mrs Smith’s father will not admit what he is doing, but everyone knows about it, including his long-suffering wife and daughters. The growing piles of envelopes from the scammer arrive daily and are overtaking the bedroom, and now the summer house is full of scam mail, too, providing clear evidence of the scale of his obsession.

The local post office and coffee shop know him well, because of his routine visits, almost every day, to register post containing the money. He sends up to £150 a week to these criminals. He insists on making copies of letters so that he has proof should he need it. Of course the people in the post office cannot stop an elderly man from sending post. His family feel powerless. They have tried to make him watch BBC exposés, look at the Think Jessica website, and read leaflets and posters. They have tried to get him help from independent financial advisers; orchestrated visits from Derbyshire police officers; and even arranged a personal visit by Marilyn Baldwin from Think Jessica, who tried her hardest to convince him but to no avail. All attempts were met with the response, “That’s not me” or “Nothing I didn’t know already.”

Marilyn Baldwin is passionate about getting “Jessica’s scam syndrome” recognised as a mental health condition. Those referred to as having such a syndrome would be people trapped in the delusional world created by the scammer. Mrs Baldwin feels passionately that calling individuals obsessed with scam mail “victims” or “addicts” is not enough, as it does not explain their behaviour adequately or the torment faced by those trying to protect them.

Scam mail has the potential to make people mentally ill, as it opens up a delusional world that goes deeper than any other addiction or obsession. This inability to get some victims to see the reality of their victimisation and delusions has led some people to ask whether psychiatrists should consider the existence of some form of psychological or mental health condition that drives people to be repeated victims of scams. I strongly suspect that the addictive and irrational behaviours from which many of these victims suffer might be well known to psychiatrists. Perhaps we should consider how existing powers under the Mental Health Act 1983 could be used to empower families and those with safeguarding responsibilities to intervene and save victims, such as Mrs Smith’s father, from their own delusions.

Mrs Smith’s family feel so strongly that they have set up their own action group called “The Fight To Stop SAPCO”—scams and prize cheque offences—which already has a small army of people behind it, including a consumer affairs lawyer from Nottingham, an EU lawyer from London who is aware of international frauds of this type, a private investigator working internationally uncovering perpetrators of international finance crimes and fraud, Derbyshire trading standards, Marilyn Baldwin of Think Jessica, and DC Jim Egley of Operation Sterling at the Serious Fraud Office.

What is most galling, especially to the families of the victims, is that these scams take place with the full awareness of the Royal Mail, which often handles envelopes full of cash that it knows have been fraudulently obtained. Although the Royal Mail is able to recognise when such scams are happening, it remains powerless to intervene, which is a source of intense frustration among postal workers.

Let me turn to the current difficulties in tackling this issue. The nub of the matter is simple. First, there is confusion over the law and what it permits the various organisations involved in detecting and prosecuting these frauds to do. Secondly, there is a patchwork quilt of legislation derived from various Acts of Parliament, which creates a lack of clarity in this area. Thirdly, there is an overly burdensome demand to protect mail in transmission, which means postal workers often observe the scams happening, but are either powerless, or believe themselves to be powerless, to intervene. The result is that the fraudsters continue to profit while the authorities are unable to do anything definitive for fear of acting beyond their legal powers. In effect, no one knows what they can do when a scam is detected, even though they know what they would do if they could.

The law needs clarifying, responsibilities need redefining and powers of intervention need enhancing.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I congratulate the hon. Lady on securing this debate on this important, but under-reported, issue. It is clear that the purpose of this debate is to discuss postal mail scams, but I hope that she agrees that internet e-mailing scams are also an important problem. When looking to clarify the law over postal mail scamming, attention should also be paid to the consequence of e-mail scamming.

[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?

[Mr Gregory Campbell (East Londonderry) (DUP)]

I thank the hon. Lady for giving way, and I join others in congratulating her on securing this timely debate. On the issue of powers of interception, does she agree that very often, and particularly in rural areas, the local postman or postwoman, who has very distinct and detailed local knowledge of people who may have been victims of scam mail in the past, could readily and usefully deploy that knowledge in identifying scam mail before it reaches its intended target?

[Heather Wheeler]

I thank the hon. Gentleman for his intervention; he is absolutely spot on. One issue that has come to light is the complete frustration of postal workers. They know that they cannot stop this scam mail because they are being told by their bosses that they are not allowed to stop it. It is interesting that we genuinely feel that there must be sufficient safeguards in place to protect both the addressee’s right to privacy and their data, but we also feel that there is a sensible, proportionate way around the issue.

What can be done to resolve this issue? Who is best placed to deal with it? Who should detect and investigate such scams? As I have said, the Royal Mail is best placed to detect many of the scams, and then either the police or trading standards officers can investigate and prosecute those involved. In many cases, trading standards officers remain the best first port of call. That is the current situation and in my opinion it does not need to change. There is no need for new bodies or agencies, but merely for existing powers to be clarified and improved and for existing bodies to be enabled to do the job with which we charge them.

That prompts the question whether there are already sufficient powers of investigation in place; if there are, there is no need for new powers. Could an amendment to an existing Act close the loopholes? The answer is, “Very possibly and—frankly—very easily.”

Exactly two years ago, in January 2011, my hon. Friend the Member for Romsey and Southampton North presented to the House the Consumer Protection (Postal Marketing) Bill. It aimed to regulate postal mass marketing, which my hon. Friend rightly defined as the unsolicited sending of mail shots and letters to UK residents. She noted that, although in the majority of cases it is perfectly legal marketing of goods and services, in many cases it is used for fraudulent purposes—so-called “scam mail”.

The purpose and spirit of my hon. Friend’s Bill was not to prevent legal and legitimate marketing, but to augment the existing legislation and to close the very loopholes that I have just mentioned. It also intended to clarify the legal position of the Royal Mail and trading standards officers, and to give Royal Mail the powers that it and trading standards agree it needs to act decisively against such frauds. Therefore, this Bill is a great place to start, offering a road map for resolving the issue.

The main pieces of legislation that my hon. Friend’s Bill sought to augment were not the Acts that I mentioned earlier, but the Consumer Protection from Unfair Trading Regulations 2008 and the Fraud Act 2006. Those two pieces of legislation have some use in dealing with scam mail, but crucially they are limited in their application because they only deal with scams originating in the UK and can only be enforced once a scam has been committed. My hon. Friend’s Bill would have enacted new powers and made a genuine difference in the detection and prevention of these frauds, wherever they come from.

My hon. Friend’s Bill would have been a very welcome piece of legislation, and was regarded as such by Royal Mail, trading standards and the National Fraud Authority. Those bodies all supported it and hoped that it would be given Government time. I echo that call now, particularly if the Bill could be resurrected and amended to deal with the issues relating to the need for a warrant from the Home Secretary, and if it could clarify what powers Royal Mail actually has.

As I said, sadly my hon. Friend’s Bill did not secure Government time and Parliament lost a real opportunity to produce a genuinely worthy piece of legislation that would have undoubtedly secured both cross-party support and the support of the general public. As a result, the scammers continue to profit in the face of Government inaction, which is greatly to be regretted.

I brought the case of Mrs Smith to the attention of the Minister of State, Home Department, the hon. Member for Taunton Deane (Mr Browne), who is the Minister with responsibility for crime prevention. However, I was disappointed with his response. Although he drew my attention to a number of Government initiatives aimed at tackling fraud in a general sense, his response fell short of proposing legislation to close the loopholes that allow scammers to continue to thrive.

We are legislators, are we not? We are elected to propose, scrutinise and enact legislation, and we should not be afraid of using the privileges of our office to enact laws that are required to enable bodies to carry out their statutory duties. Indeed, to fail to propose such legislation is a dereliction of our duty to our constituents and a betrayal of their trust in this House. To quote the former Member for Wendover, the great Whig philosopher Edmund Burke,

“All that is required for evil to prevail is for good men to do nothing.”

I hope, therefore, that the Minister will do something. I believe that we have done nothing definitive to tackle this issue, and as a result evil continues to prevail and my constituents continue to fall victim to these most wicked of frauds.

Trading standards and the Royal Mail have identified a loophole and proposed a mechanism for closing it. Legislation is needed, so why can the Government not find time for a non-contentious Bill, which commands cross-party support, to protect the most vulnerable people in society, some of whom live in every single one of our constituencies across the country? Indeed, I will quote to the House the words that the Minister with responsibility for crime prevention wrote to me in his response to the case of Mrs Smith:

“It is clear that for some time the response to fraud has not been good enough and criminals have exploited this. The response has been too fragmented, not enough use is made of intelligence or advanced investigation techniques, and there is not a strong enough focus on prevention”.

I could not agree with him more. There has not been “enough focus on prevention” and therefore powers to prevent postal marketing scams that could easily be enacted should be enacted. We demand a lot of our statutory bodies, and when they ask for the powers to do their job, it is in the public interest to grant them.

I urge the Government to think again about the confusion in the current legislative framework, reconsider the position of Royal Mail and trading standards, and rather than call for greater public awareness, new bodies or new initiatives, do what the experts ask, which is to find Government time for a Bill that will close the loopholes that enable fraudsters to continue to scam innocent victims. Such a Bill exists. I urge the Government to look again at the Bill that my hon. Friend the Member for Romsey and Southampton North introduced two years ago, find Government time for it, and act decisively to empower Royal Mail to act to stop mass marketing scams.

--- Later in debate ---

[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.

[Heather Wheeler]

With 12 minutes to go, I am not going to fall out with the hon. Lady. Unfortunately, given protocol, I did not wave around the envelopes, but they really are obvious.

[Jo Swinson]

I take the hon. Lady’s point that some may be obvious. I do not think that all of them are. We are talking about 3.2 million victims of scams a year, so there will be a wide range.

If we begin to give people licence to intercept mail, that creates a fundamental change in the postal workers’ role. There is a related issue—a genuine operational issue—about feasibility and the resource required. The postal service is universal and is welcomed and valued. We need to think about the resource impact, given the 60 million items of mail a day.

There are, however, things that Royal Mail can do, given the communication channel in which it operates. Hon. Members have mentioned Royal Mail employees feeling frustrated because they want to ensure that they can help. That is often because the local posties will have a pleasant chat and pass the time of day with people, or say hello to them, in particular someone who is housebound or in during the day. They are frequently the people who notice if someone has had a fall or been ill, because the mail is piling up at the door, and many of them take a real interest as upstanding members of the community. There is no reason why they should not be part of the solution, and that is why there is specific awareness among postal workers of such issues—general awareness in the population is vital, but such front-line workers have particular access to individuals, where things are happening.

Such awareness has already started to develop. The hon. Member for Edinburgh South mentioned the lack of funds for advertising campaigns, which is right, but there are other ways of communicating and getting information out there. For example, Royal Mail has an employee magazine, in which the Think Jessica campaign has been publicised, including contact details and its aims. If postal workers are concerned about someone on their regular round, they have a way of being able to pass on those complaints to Action Fraud to ensure that the police and the authorities can deal with the issues. That is important.

At the other end—not the mail delivery end, but at the beginning, trying to stop things before they get into the postal system—Royal Mail is working alongside the police and the UK Border Agency to identify some of the scam mailing houses. Royal Mail has the ability to cancel contracts, and it has done so with particular bulk mailing houses if they are found to have been used to facilitate scams. Such action in the early stages is important, as is the role of that trusted individual with access as a conduit for good advice.

One idea was that postal workers could have an information leaflet to give out, which would be less intrusive than a power to open mail—I have outlined some of the problems with that proposal. Royal Mail does not leaflet at the moment, but I am happy to go away and take up the idea with Royal Mail, to see if it is feasible and useful. In the scenarios outlined by my hon. Friend the Member for South Derbyshire—I can imagine the brandishing of the envelopes that were pretty obvious—a leaflet could provide targeted and useful information without being intrusive or invading privacy. With awareness and enforcement, we can ensure that people understand the risks and can clamp down hard on the people who are abusing the system and conning innocent people out of money, causing a great deal of distress. That is vital.

I accept that my response is slightly disappointing for my hon. Friend, because I cannot say that the Government will support the proposed legislative change. I can, however, say that the Government are sympathetic to the problem she has rightly outlined. The victims of such scams are people who should not be conned out of their money. The practice is unacceptable and, to use a word used earlier, cruel. I disagree that we should deal with it by putting the onus on Royal Mail front-line staff and giving them an extra responsibility to identify things, then intercept and open the mail. Such an approach would be heavy-handed and there would be a raft of unintended consequences.

Another general principle is that legislation is a last resort. Some good ideas have been proposed in the debate today, and we can take those forward to see whether they can have a further impact. Indeed, excellent work is already going on, started through Scambusters under the previous Government, continued under this Government, to ensure awareness and that proper enforcement is followed up. Trading standards, Citizens Advice, individual MPs, UKBA and the police all have an important role to play in raising awareness, in improving enforcement and in putting a stop to this unacceptable practice.