Telephone and Online Scams

Patricia Gibson Excerpts

Tuesday 4th June 2019 Westminster Hall

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I thank the hon. Member for Ogmore (Chris Elmore) for securing the debate and for his comprehensive exposition of the matter.

The cost of scamming in our society is undoubtedly huge and cannot be counted only in pounds, shillings and pence, although the financial cost is significant. As we have heard, scamming affects all sections of our communities, but the elderly and other vulnerable members of our communities are at particular risk. The Office for National Statistics predicts that by 2030, the number of elderly people living in our communities will increase by 34% from 11.6 million to 15.7 million, and the number of people living with dementia is set to increase from 850,000 to 2.1 million across the UK.

We should not forget that the impact of dementia and other impairments makes vulnerability much more pronounced and the ability to target an individual repeatedly much more possible. The hon. Member for Westmorland and Lonsdale (Tim Farron) discussed the impact of scams, and it is worth noting that victims of scams are nearly two and a half times more likely to require increased care provision or to die within two years of being scammed. It has also been reported that victims often experience a rapid drop in their physical health after realising that they have been scammed.

Those who perpetrate scams use increasingly sophisticated techniques to scam their victims, in some cases repeatedly. Trading standards, although already hard-pressed, is working on the frontline to do all that it can to safeguard the vulnerable. The most sinister, cynical and cruel aspect of scamming is that it is a criminal activity that targets the most vulnerable in their own homes. The one place where any of us should feel safe becomes the setting for people being conned out of their money, via sales scripts, data collection and sometimes even targeted mail.

The most common telephone scams are cold calls. I am delighted that, despite an unnecessary two-year delay, the Government have finally implemented my ten-minute rule Bill on nuisance calls in full, because there is a huge overlap between cold calls and nuisance scams. The adoption of that Bill is a very good start, but more needs to be done.

As the hon. Member for Westmorland and Lonsdale set out, the impact of scams goes far beyond the financial loss. It is emotional and psychological, and has been shown to have an impact on our wellbeing. The hon. Member for Ogmore pointed out that scams can ruin lives and split up families, with the consequences lasting long beyond the initial trauma of financial loss. Moreover, even when financial losses are comparatively low, scams lead to a breakdown in consumer confidence.

The full effects of the harm caused are difficult to estimate, as—alarmingly—only around 5% of victims report that they have lost money. The average age of a victim is 74 years old and the losses average about £1,000, but many lose hundreds of thousands of pounds. Victims of scams often feel embarrassed and are afraid that their families will judge them to be no longer capable of living alone. For that reason, scams may not be reported, which leaves the victims open and vulnerable to repeat scams. Some people find it extremely difficult even to admit that they have been the victim of a crime.

The scale of the problem and its associated costs are huge. Alongside that, we know that trading standards is struggling to cope, although the work it does is worthy of high praise and demands our respect. I also want to highlight the excellent work carried out by the Credit Industry Fraud Avoidance System, which works to prevent fraud and financial crime through the sharing of confirmed fraud data. Last year, CIFAS prevented more than £1 billion in fraud loss by sharing data across sectors. Its data shows that in my constituency of North Ayrshire and Arran, 278 frauds took place last year and there were 103 victims of fraud. That is a mere snapshot of the true level of fraud, which is likely to be much higher because of under-reporting.

Scams do more than rob people of their money. They rob them of their confidence; their belief in themselves and in their judgment; their self-esteem; their willingness to trust people; and the help others may be able to offer them. Ultimately, they rob them of their ability to live full, happy, independent lives. Research carried out by Which? shows that what makes us vulnerable to scams is that we are all overconfident about our ability to spot one. Ironically, that overconfidence makes us all the more vulnerable. The gap between confidence and ability is dangerous.

What can we do? I absolutely agree with the suggestion put forward by trading standards that financial institutions should recognise that clients with dementia are by definition more at risk of being scammed and that measures need to be taken to protect that group as a duty of care—I would argue that it should be a legal duty of care. Those who are diagnosed with dementia live with a cognitive impairment, and that must be recognised as we seek to protect them.

The sharing of personal details and information with other organisations should of course require a clear opt-in, as opposed to an opt-out, which is an important tool in the fight against scamming. The normal default position of charities and other organisations should be that personal details are not passed on or shared. Although there is legislation in place, I am not convinced from the evidence I have seen that it is being as rigorously adhered to as it should be.

It is worth noting that about 850,000 people in the UK currently live with dementia and the figure is expected to rise to more than 1 million by 2025. Sadly, the scammer does not see people who need help and are vulnerable; they simply see rich pickings. It is the duty of society to do all it can to protect these vulnerable, elderly people.

Customers should be able to formally notify their bank in writing if they feel at risk and request that all transactions over a certain amount to new payees have a 24-hour delay before being processed. The hon. Member for Strangford (Jim Shannon) discussed his experience of that, and it is time that all banks had a legal duty to do the same. It would give time for the proposed transaction to be challenged and would potentially stop scammed money from leaving a scam victim’s account.

Of course, it is not just the elderly who can be rich pickings for scamming. In 2015, almost 24,000 people aged under 30 were victims of identity fraud, up from 15,766 in 2014 and more than double the 11,000 victims in that age bracket in 2010. Fraudsters get hold of their victim’s personal information—such as name, date of birth, address, their bank and who they hold accounts with—in a variety of ways, including through hacking and data loss, as well as by using social media to put the pieces of someone’s identity together.

Some 86% of all identity frauds in 2015 were perpetrated online, and that figure is rising. Interesting emerging evidence suggests that younger people report losing money to fraud more often than older people, as scams move online. Older people are more reluctant to report being scammed, but when older people are victims of scams, their losses tend to be much greater.

Society, the Government and industry all have a role in preventing fraud. Our concern is that the lack of awareness about identity fraud is making it even easier for fraudsters to obtain the information they need from social media sites. It is important that we all check our privacy settings today and think twice about what we share on social media.

The hon. Member for Westmorland and Lonsdale talked about the closure of bank branches, which is an important point. There is no doubt that banks are trying to force those of us who have chosen not to bank online—I include myself—to do so, not because it is convenient for us but because it is convenient for the banks. I for one will not bank online and I urge those who are not comfortable doing so to similarly resist that pressure.

We have heard today about some eminently sensible and straightforward measures that could be taken by having a more strategic approach. Banks having safeguards for vulnerable people could do much to protect those who are most at risk of scamming—the elderly and vulnerable in our communities. We should also reach out to those of all ages who use social media but do not have the information they need to protect themselves from identity fraud. We could do more to give people information, with education campaigns to better inform people how they can take some responsibility and some simple steps to protect themselves, as the hon. Member for Strangford suggested.

I urge the Minister to reflect on the suggestions that have been put forward to tackle this problem and to confront the situation whereby people are robbed in their own homes—an experience that they subsequently find deeply scarring. The effects are far-reaching. Let us do more to protect the victims of scams—we can do more. The scammers and fraudsters are very creative; we have heard some examples of that today. They are evolving their techniques. We need to be creative and evolve our measures to deal with them. In the end, we are all at risk, so we need to work together to protect our communities. I am very interested to hear what ideas the Minister is going to take forward.