Cyber-Fraud in the UK

Kit Malthouse Excerpts

Tuesday 25th May 2021 Westminster Hall

[The Minister for Crime and Policing (Kit Malthouse)]

It is a great pleasure to appear before a fellow Scouser, Mr Dowd, who was elected on the same day as I was, back in 2015, although we originate from different ends of the city of Liverpool—yours was the posh end and mine was slightly rougher. [Laughter.] It is great to see you join the Panel of Chairs and to preside with such wisdom over us today.

I am grateful to the hon. Member for Ogmore (Chris Elmore) for securing this extremely important debate, in which Members have spoken with some passion and concern about this issue, underlining the fact that it must be a significant Government priority. I can assure them that it is.

We recognise the devastating impact that fraud can have and how crucial it is that we do everything in our power to protect victims and bring the perpetrators to justice. As a number of Members have outlined this afternoon, these crimes are occurring on a vast scale. According to the latest figures for the year ending December 2020, fraud accounted for over a third of all crime. Is there anybody in the nation who has not been touched by it? I myself was plagued with calls from a recorded message purporting to be the National Crime Agency, telling me that my national insurance number had been suspended and that I was likely to be arrested unless I pressed “1”. They obviously picked the wrong guy, in that I can call the NCA myself. But after I highlighted that problem in a newspaper, strangely enough the calls dried up the very next day. These people must be readers of The Times.

In all seriousness, however, I was very sorry to hear the experience of the mother of the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone). These crimes can be extremely distressing, particularly when they are targeted at the vulnerable or the elderly, and we really need to focus, because behind the numbers are real people, which we must always keep in mind.

As Members have outlined, the impact of being targeted by fraudsters can be truly devastating, both financially and emotionally. Victims’ lives are turned upside down, their savings are gone and their confidence is shattered. There is also a knock-on effect for society as a whole. We know, for instance, that the money that fraudsters can make goes to fund other serious and organised criminality, such as drugs and terrorism, and fundamentally the function of our economy is based on trust. Those economies that do best in the world are those where there is low corruption, low fraud and a high degree of trust between individuals, and that is something that we must preserve for our economic well-being as well as for our mental wellbeing.

As people have pointed out, with the pandemic and the rise of people staying at home, the importance of staying safe in the virtual world has increasingly become a pressure on us all. Our approach to tackling fraud and online scams puts the interests of victims first—trying to prevent fraud, providing the support that fraud victims need and catching the criminals responsible. It is my view, and that of the Government, that victims must be at the heart of all that we do. We are deeply concerned about the growth and scale of this type of crime, which is increasingly sophisticated and rooted in complex social engineering.

We are working across Government and with the financial sector to ensure that as many victims as possible are able to claim their money back or are reimbursed. We are keen to improve the quality, speed and consistency of victim support and reimbursement, and we have been working closely with colleagues in the Treasury to explore what more might be done to promote greater consistency across the sector.

However, we know that for victims, more is lost than just money. Our estimates suggest that around one in 13 people experience fraud each year. Many of those targeted will suffer serious emotional harm; feelings of shame, trauma and invasion of privacy are all common, as well as a loss of confidence in themselves and in the systems that are in place to protect them. We need to prevent that kind of suffering.

We are working with national and local policing, including police and crime commissioners, to support the victims of such crimes. The National Economic Crime Victim Care Unit, based within Action Fraud, also plays an important role by helping victims to recover and to protect themselves against future fraud.

Our law enforcement and intelligence colleagues also play a crucial role in keeping the public safe and bringing these opportunistic criminals to justice. We are considering all routes, including legislation, to give them the tools they need to go after the fraudsters and, crucially, to protect those who are vulnerable to these harmful crimes.

At the forefront of our response is the law enforcement cyber-crime network, which operates at national, regional and local levels to combat the threat from this type of crime and to provide support to those affected. We are boosting the capabilities of the National Crime Agency’s National Cyber Crime Unit and increasing its ability to investigate the most serious cyber-crime. We are also continuing to invest in the cyber-teams in each of the regional organised crime units across England and Wales, to bolster the regional response.

As the hon. Member for Ogmore outlined, fraudsters will use any hook to commit these crimes and covid-19 has been no exception. We have seen criminals exploiting unease and fear, by opportunistically selling bogus personal protective equipment, running phishing campaigns and impersonating Government Departments and the NHS, as hon. Members have pointed out. We are also aware that fraudsters are using the roll-out of the covid-19 vaccine to target and scam elderly and vulnerable people. The NHS will never asked for payment or bank details; if someone is asked to provide financial details or pay for the vaccine, that is a fraud.

The Government are working intensively with local enforcement teams to identify, disrupt and stop these appalling scams and amplify public safety messaging about fake messages that claim to be from the NHS, instructing people to sign up for the vaccine. We have launched a gov.uk page containing advice on the matter, as the hon. Member for Caithness, Sutherland and Easter Ross asked, and we encourage the public to remain vigilant and forward suspicious emails to report@phishing. gov.uk, as my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) has done, and text messages to 7726, which is free. These systems allow the National Cyber Security Centre and telecoms companies to remove the infrastructure that the fraudsters exploit. The suspicious email reporting service has already led to more than 5.8 million reports, with more than 43,000 scams and 84,000 websites taken down.

We do want to make the UK the safest place in the world to be online. To achieve that, it is vital that we leave no space for fraudsters to operate. First and foremost, we must ensure that everyone who can, including the public and private sector, prioritises preventing these types of fraud. That is critical to prevent the significant emotional and financial harm to victims. As my hon. Friend the Member for Cities of London and Westminster pointed out, in other types of crime we promote exactly that approach. Did you know, Mr Dowd, that about 50% of thefts from motor vehicles happen because people leave the car open and forget to lock it, and 43% of burglaries happen because somebody leaves a window or door open? Cyber-crime is no different. Preventing these types of fraud is critical to prevent the significant amount of emotional and financial harm to victims, who experience the economic damage to our businesses, and also to disrupting the organised criminals who perpetrate these crimes. To do that, we are taking steps to ensure that fewer people fall foul of such scams in the first place.

On the draft Online Safety Bill, we have taken the decision to bring user-generated fraud into the scope of the Bill. The Government have engaged extensively with a broad range of stakeholders, including the finance industry, consumer groups, civil society organisations representing victims of fraud, law enforcement and other public bodies. The inclusion of user-generated fraud in the Bill will require platforms to tackle some types of fraud, such as romance and investment scams, that result in massive financial losses and inflict significant psychological harm.

The Bill would require tech companies to protect their users from those types of fraud, which is part of a collaborative effort by the Government to tackle online fraud, working with law enforcement, regulators, industry and consumer groups. We are determined to relentlessly pursue those fraudsters and close down the vulnerabilities that they exploit. The Department for Digital, Culture, Media and Sport will shortly be considering whether tougher regulation on online advertising is also needed.

The response to fraud demands a collaborative, innovative response to keep pace with the changing threat and new technologies, and we continue to work closely with the industry to drive progress. A great example of that kind of partnership is the specialist dedicated card and payment crime unit, a police unit that targets and disrupts credit card fraud and demonstrates the positive collaboration between UK Finance, the City of London police and the Met police, together with the Home Office, who are working to develop its relationships online.

I am extremely grateful to all hon. Members who have contributed this afternoon. I hope that I have reassured people that this is a particular area of importance for us as it grows. This is a novel area for crime fighting. The iPhone has only been around for 10 or so years—our lives have been transported online in a frighteningly quick time. It is incumbent on us all—in Government, in policing, in law enforcement more generally and in those large organisations that steward, shepherd and track us, follow us and sell us things online—to make sure that we are as safe as possible. I believe that across Government, law enforcement, those businesses and beyond, we have a collective responsibility. We will be working together and, in the years to come, we will all be safer.