Financial Fraud and Economic Crime

Jim Shannon Excerpts

Wednesday 11th September 2024 Westminster Hall

[Valerie Vaz (in the Chair)]

Order. Apparently, there is an acoustic problem for everybody sitting in the front row. Could the hon. Gentleman move to the back as the mics are not working?

[Jim Shannon (Strangford) (DUP)]

Always best to be a Back Bencher, Ms Vaz!

[Mr Charters]

May I continue, Ms Vaz?

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[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairship for the second time today, Ms Vaz.

I thank the hon. Member for York Outer (Mr Charters) for setting the scene so well. One of the great things about debates with new Members is that they bring their expertise, knowledge and interests in various subject matters to our debates, which enriches the House greatly. I very much look forward to contributions from other hon. Members when the time comes.

I am pleased to see the Minister in his place. He and I have been friends a long time while on the Opposition side of the Chamber, as it was. I am pleased to see him in a place that is a well-deserved honour for him. I am also pleased to see the shadow Minister, the hon. Member for Hamble Valley (Paul Holmes), in his place.

I am pleased to speak in this debate in the short time that we have. I have heard of countless economic crime cases, including scams and frauds. Constituents must be aware of the dangers, so it is vital to give some background in discussion of such matters. When I speak, I always bring in a Northern Ireland perspective, and I wish that I could tell the hon. Member for York Outer that things in Northern Ireland are better, but they are not. When he hears the figures, he will probably be shocked at just how bad they are.

Last year, according to the Police Service of Northern Ireland, £23.1 million was lost to fraud over 13 months in Northern Ireland. Between December 2022 and January 2024, there were some 5,412 reports of fraud, with lost sums ranging from £5,000 up to almost—unfortunately—£250,000. I just cannot comprehend how that can happen, but it happened. Those sums were taken by criminals from people’s bank accounts. The figures give an idea of where the scams are and where we need to focus. In 2023 alone, there were 3,400 cases of economic fraud. In many such cases, frauds and scams are committed at a distance through social media, online websites, phone calls and text messages.

I will probably age myself by saying this, but I remember getting a message from a general in Nigeria. My goodness! Right away, my hackles were up, because I do not know any generals in Nigeria. When I was told that I had won $100,000 or whatever it was, I knew I could not have done, because I did not enter any competition, and I had no friends or relatives out there. It was clearly a scam, but they claimed that if I sent them my bank details, they would forward an astronomically large amount of money to me. The point I am making is that if something sounds too good to be true, it probably isn’t true. Someone turns up and says, “You have won this amount of money, just send me your bank details and we will transfer the money to you.” I am not smarter than anyone else—I do not profess to be and am not—but whenever someone comes along with something that is just that good, it cannot be good, so beware.

I want to give the example of an elderly lady who came to see me—I speak for the elderly and the vulnerable as my focus for the short time I have. Just last week, in my office I dealt with an issue where a lady clicked a link on Facebook to lodge money in an online pot to gain interest over a period of time. Her details were given and the £276 immediately taken from her account. The dangers of social media are broad enough, and online fraud and scamming seem to be at a peak. Unfortunately, I see that regularly in my office. We advised her immediately to put a block on her card and to contact the local PSNI to make a report. But she is only one example, unfortunately, of what so many people face on a daily basis, every week in my constituency.

I am just looking up something from Danske Bank, which I belong to. It sends such things regularly, as a wee warning perhaps, and a caution:

“We want to remind you that we are all at risk of fraud, even if you are scam savvy. Bank impersonation scams are on the rise”

—which the hon. Member for York Outer referred to—

“but remember, we will never call you to ask for log-on details, PIN numbers or passcodes, including those we send by text.”

My bank sends that to me every month or every six weeks. If banks did that as a reminder to people to keep it fresh in their minds, it would be very helpful.

The UK economic crime team is responsible for leading the industry’s fight against economic crime, but more needs to be done to support those who are not perhaps tech-savvy, which I profess that I am not: I sometimes do not understand the dangers that are out there. The online fraud steering group has numerous aims in tackling economic crime, including making the UK look like the least attractive place to commit such crimes, but they still happen with a regularity that tells us that that is not the case. Whether internally in the UK, or internationally where foreign actors interfere, we need to ensure that our constituents are protected and, most importantly, aware.

The PSNI back home in Northern Ireland has a crime prevention officer who specifically visits elderly and vulnerable people, including groups who meet every week. They go and talk to them and give them information. I would suggest that that could be done with greater regularity to remind people, because people do need to be reminded on a regular basis.

I will finish now because I am conscious that others want to speak. In terms of money laundering, we have seen terrible examples in Northern Ireland where, to be fair, the PSNI in conjunction with other police forces across the United Kingdom and further afield have been able to get on top of it, but it still happens. There are scams and fraud, so there is more work to be done. I look to the Minister with great respect. I know he will come back with the answers that will perhaps encourage us and give us some hope. I look to him for guidance on his updated plans to make our economic system run smoothly—it has to—and ensure that across the whole of the United Kingdom of Great Britain and Northern Ireland we have a good structure for dealing with the issues and also the means to do so.

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[Chris Coghlan (Dorking and Horley) (LD)]

It is a pleasure to serve under your chairmanship, Ms Vaz, in this brilliant and necessary debate. I commend the hon. Member for York Outer (Mr Charters) for securing this debate on financial fraud and economic crime and for his professional expertise in this area. I should declare an interest: I spent 11 years working in financial services and also worked in the Foreign Office on counter-terrorism, so I know how vital this debate is.

The hon. Member for York Outer made really interesting points in his seven proposals, particularly on the link between tackling fraud and economic growth and his call for a national anti-fraud centre based on the Australian model. The Liberal Democrats called for an online crime agency in our manifesto, so it is something we would be interested in supporting.

We need a dedicated body to tackle online crimes such as personal fraud; our police forces are overwhelmed. Local forces lack the specialist skills required to combat the complexity of modern online crime. Although the National Crime Agency focuses on the most serious offences, we need an agency specifically equipped to deal with online fraud.

[Jim Shannon]

I commend the hon. Gentleman for making that reference to the NCA. I understand that just last week the NCA issued its first unexplained wealth order in Northern Ireland against a man suspected of involvement in serious organised crime. If anyone is living above their means, there should be questions about where the money is coming from. Does the hon. Gentleman feel that there perhaps needs to be more emphasis on that as well?

[Chris Coghlan]

I thank the hon. Gentleman for his intervention and I agree that there should be more emphasis on that area. I also thought that the hon. Member for York Outer made a really interesting point about the lack of FCA regulation of the Post Office, and I agree that that appears to be a gap in our existing regulatory framework.

We heard some really moving personal accounts about the cost of these online scams in the speech made by the hon. Member for Southend West and Leigh (David Burton-Sampson). We are also calling for the naming and shaming of the banks that have the worst records on preventing fraud and reimbursing victims. They should be held accountable. Financial institutions have a duty to protect their customers and we need to call them out when they do not.

The hon. Member for Strangford (Jim Shannon) talked about the power of social media scams, and we are also calling for a public awareness campaign. We need to empower everyone to spot, avoid and report fraud and scams. But let me be clear: the onus should not be on individuals to prevent fraud. Victims should never be blamed for falling prey to sophisticated scams. This issue is about building a society that protects citizens and not one that burdens them with responsibilities that should lie with institutions.

As we have heard, the numbers involved are staggering, both in terms of the billions of pounds that have been lost to fraud and the sheer volume of crime that is now online. Despite those facts, however, the previous Government’s response was lacklustre. I was moved by the hon. Member for York Outer’s point that 40% of crime is fraud, including online fraud, yet only 1% of police resources is dedicated to tackling fraud. The previous Government treated fraud with such little seriousness that they did not include it in crime statistics. Will the Minister commit to including fraud in crime statistics to demonstrate the new Government’s seriousness about this issue?

The Government must also recognise that economic crime poses a significant threat to our democracy. For too long, the previous Government allowed oligarchs to treat the UK as their personal playground, so that they could funnel dirty money into our economy and undermine our values. The Liberal Democrats are calling on the Government to begin seizing frozen Russian assets and to use the proceeds to support Ukraine; to close loopholes in economic crime legislation, which allow associates of authoritarian regimes, such as Putin’s cronies, to funnel corrupt funds into our country; and to properly resource the NCA to ensure that it has the tools to tackle complex financial crimes. We are also calling for an audit of UK-based assets owned by officials from countries with troubling human rights records, such as China and Iran, to ensure that we are not enabling regimes that abuse their own citizens.

As a former counter-terrorism officer, I know how important cross-border co-operation is. The hon. Member for Wolverhampton North East (Mrs Brackenridge) really brought out the importance of such co-operation when she made the point that the people conducting these scams are not necessarily all in the same geographical location.

I also know the damage that Brexit caused to our cross-border co-operation on serious and online crime. Will the Minister commit to improving co-operation with our European allies and with other countries more widely on financial fraud and economic crime?

I look forward to hearing the Minister’s response to the debate. It was a pleasure to serve with you in the Chair for this debate, Ms Vaz, and I again thank the hon. Member for York Outer for securing it.