Scamming: Vulnerable Individuals

Sarah Newton Excerpts

Thursday 8th September 2016 Commons Chamber

[The Parliamentary Under-Secretary of State for the Home Department (Sarah Newton)]

I wholeheartedly congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) and my hon. Friend the Member for Solihull (Julian Knight) on securing this important debate. I know they have a long-standing interest in tackling scamming, especially when vulnerable individuals are the intended victims. They have set out the wide range of harm that fraudsters and scammers can cause. I assure the House that tackling scams is a priority for this Government. Scams can have a devastating impact, particularly on the most vulnerable people in society. Mass marketing frauds can affect any one of us, at any time. We are more likely to be a victim of fraud than of any other crime, but when caught out we can sometimes feel ashamed or not want to admit we have been hoodwinked. That, however, can make it hard to get a full sense of the problem. It is really important that we do all we can to understand it and respond, which is why I welcome this debate.

We know that older people are more at risk. The National Trading Standards scams team says that the typical person it provides support to is 74 and living alone. That is why I welcome the work of Bournemouth University and the Chartered Trading Standards Institute to investigate the impacts of scams on older people. Their report on financial scamming earlier this year set out clear recommendations for action by the Government, by charities and by private institutions such as banks. As much of the debate today is focusing on the report’s recommendations, and I will address them directly.

The first recommendation was for all agencies, including banks, to recognise their duty of care to those with dementia and to take measures to protect them. The second was to strengthen rules on data protection to reduce the risk of vulnerable people ending up on so-called suckers lists used by criminals to target their scams. The third was to introduce safeguards at banks and building societies to prevent those who feel at risk of scams from losing large amounts of money.

[Dr Julian Lewis]

I thank the Minister for the interest she has taken in this issue. I know from personal experience that it is difficult to get a bank to take action unless someone has already given power of attorney, as I said in an earlier intervention. When this happened to someone very close to me and I told the bank concerned that I needed to be tipped off if there were any unusual withdrawals, nothing really happened until a particularly alert cashier, on her own initiative, did that. After five years, I eventually got success: the fraudster was forced to repay all the money and to pay the costs of the case. Therefore, will the Minister do everything possible to persuade banks, if a power of attorney is not in place, to have procedures in place if a worried close relative asks them to monitor irregular or unusual withdrawals and let them know?

[Sarah Newton]

I thank my right hon. Friend for raising that constituency case. It reflects the point that my hon. Friend the Member for Solihull made that some banks have good procedures in place and some do not, and that some staff have been well trained and some have not. We need to ensure that every person working in the bank is as good as those identified by the Nationwide, which my hon. Friend mentioned. I will come on to address the wider point: what more banks and building societies can do to protect their vulnerable customers.

I am pleased to report that the Government, regulators and private companies are responding strongly to the recommendations that I have outlined. The Government have taken action more widely on nuisance calls, including a new requirement for all direct marketing callers to provide caller line identification. That came into effect on 16 May. The measure increases consumer choice, by making it easier for people to identify direct marketing calls and to choose whether to accept them. It will also increase the Information Commissioner’s Office’s ability to investigate such calls.

Members may also be aware that, in the Queen’s Speech on 18 May, the Government announced their intention to bring forward a Digital Economy Bill. Among other legislative changes, it will introduce a measure making it a requirement for the Information Commissioner to issue a statutory code of practice on direct marketing.

[Dr Wollaston]

I wonder whether the Minister in the legislation will also address the fines that are meted out when people breach the rules. She may be familiar with the case of Pharmacy2U, which, disgracefully, sold the details of more than 20,000 of its customers, many of them very vulnerable, to marketing companies. The fine of £130,000 is derisory and no meaningful deterrent.

[Sarah Newton]

As always, the Chairman of the Health Committee makes a powerful point, and I am sure those responsible for drafting these measures will take them into careful consideration, ensuring that the scope of the measures captures some of the very harmful behaviour of scammers and fraudsters and that there is sufficient deterrent to those considering undertaking these crimes from the regime of punishments put in place, including fines.

The overall aims of the new code of practice will be to support a reduction in the number of unwanted direct marketing calls and to make it easier for the Information Commissioner to take action against organisations in breach of the direct marketing rules.

Secondly, the Government-funded national trading standards scams team is working with the British Bankers Association, the Building Society Association and others to produce a new national banking protocol for doorstep crime and other scam issues discovered at branch level. The Financial Conduct Authority is building on this. Its ageing population strategy will consider how older consumers engage in financial services and make best use of the products and services they use. The FCA intends to release a regulatory strategy and recommendations by 2017.

[Justin Tomlinson]

My hon. Friend mentions trading standards services, and may I ask her to praise the work of both Poole and Dorset trading standards, which do such a good job in this area? However, they can only do their work if the victims come forward; that is the only way in which successful prosecutions can be secured. So I invite her to continue her work with trading standards and to highlight the important work they do to ensure we get prosecutions.

[Sarah Newton]

My hon. Friend raises an important point. My own trading standards team in Cornwall, like that in Poole, does an excellent job. In addition to the vital work they do in all our communities, they are supported by national bodies—one for Scotland and one for England and Wales. A lot of this activity is related to organised and serious crime, and these national bodies do make sums of money available for support where we are seeing particular instances of scamming in communities. That national and local working is a very good model.

Following scandals in 2015 that highlighted unacceptable charitable fundraising practices, a new Fundraising Regulator has been established. Chaired by Lord Grade of Yarmouth, this independent regulator is tasked to set high standards of fundraising practice and to deal with public complaints when those standards have been breached. It has a range of sanctions and can refer serious non-compliance or abuse to the relevant statutory regulator.

The scams team has also been working in partnership with Royal Mail and other postal operators, training over 2,000 postmen and women to spot scam letters. Already over 700 vulnerable households have been identified and are getting support. Even more importantly, contracts to carry the mail are being cancelled, stopping the letters from getting to their intended victims in the first place.

Enforcement is important in tackling this crime. That is why the Home Office launched a joint fraud taskforce in February this year. The taskforce includes, among others, the City of London police, the National Crime Agency, Financial Fraud Action UK, the Bank of England, National Trading Standards, CIFAS, as the hon. Member for North Ayrshire and Arran mentioned, and Age UK. The taskforce is a good example of the approach we are taking to crime prevention. This is very much the focus of the modern crime prevention strategy the Government published in March this year. Its key themes are about working together to understand the drivers of crimes—why and how they are committed—and then working together to try to stay one step ahead of the criminals to prevent more crimes from happening in the future. The work of the taskforce oversight board is an excellent example of such collaboration, bringing government, law enforcement and industry together in a focused way to develop a clearer and common understanding about the changing nature of fraud and how we can all take action against it.

In its first few months the taskforce has demonstrated that it works. Improved data sharing has led banks to close hundreds of accounts linked to fraud; bank branches in London, alongside the Met and trading standards, are introducing a new fraud intervention, and prolific fraudsters have been arrested since the launch of a new campaign in July.

I can assure hon. Members that the Government regard tackling scamming as a priority, and we will continue to work with national and local partners to address the issues raised today and to do everything we can to prevent the horrendous consequences of the scams we have heard about and to enable more of the good work we have seen.

I want to highlight one extremely good example I came across from Trading Standards Scotland. It funded and co-ordinated a project to install over 200 call-blocking devices in vulnerable consumers’ homes. These devices block 95% of nuisance calls. The impact of preventing scammers from reaching vulnerable and elderly people should not be underestimated. Trading Standards Scotland estimates the resulting saving to individuals and the public purse is between £3,000 and £7,000 per call-blocker.

But really what we are here to do today is to think about the effect on people, and I would like to read a quote from one of the beneficiaries of the scheme that illustrates the true human value. She says:

“I have got my life back. I am nearly 70 and I think how did I let people get me like this? My son is ill and cannot protect me. I have had to get police protection in the past for nuisance calls. Now I can protect myself—it is marvellous. I feel in control. We can sit and have a cup of tea without being disturbed. The dog is even less stressed.”

In conclusion, I repeat my thanks to the hon. Member for North Ayrshire and Arran and my hon. Friend the Member for Solihull for securing this important debate. I will be listening intently to the contributions of all Members today, and I can assure them of our utter determination to tackle this dreadful criminal activity.