Scamming: Vulnerable Individuals

Sarah Wollaston Excerpts

Thursday 8th September 2016 Commons Chamber

[Julian Knight]

I could not agree more. The demographics in our constituencies are very similar, certainly in terms of age—in Silhill ward in my constituency, 40% of people are over 65. As my hon. Friend says, the average age of scamming victims is 74. Fraudsters have many different ways of making their approach, but in the main they instinctively target elderly people—although not to the exclusion of everyone else—because, frankly, the older generation is quite polite. They do not want to put the phone down straightaway and they might respond to a letter. However, as I will explain, as soon as someone does that, they enter a whole new world in terms of the information gathered by these fraudsters.

The national average cost of fraud per victim is purportedly just over £1,000, but the amounts can be a lot higher. I was staggered to find that in my constituency the average cost is £9,000 for each event of fraud, which probably reflects our relatively affluent population and also the fact that we have an older population, as my hon. Friend and I discussed a moment ago. Older people are disproportionately the target of scammers, but we must not forget that the youngest reported victim that I have been alerted to was only 19. Can we imagine starting out in life, effectively, as an adult, and finding that one of our first experiences is to be hoodwinked by one of those despicable fraudsters? That demonstrates that no one who is old enough to handle their own finances can afford to be complacent about the risk of fraud.

Being stung is often only the start of the process. A victim’s details can be sold on more than 200 times, putting them in the sights of a much larger pool of international criminals. The National Trading Standards scams team has found an astonishing 106,000 potential victims of fraud on captured criminal target lists. The fraudsters call those sucker lists, which shows what they think of people. Investigations suggest that the names of 560,000 victims from the UK are already in circulation.

We must not fall into the trap of considering only financial costs as the social and human damage caused by fraud can be just as severe. Indeed, according to trueCall, the phone screening service, the impact of scamming is comparable to that of violent crime. For starters, 29% of victims suffer a major depressive episode in the 20 months after a crime, compared with just 2% of non-victims.

[Dr Sarah Wollaston (Totnes) (Con)]

Has my hon. Friend also considered the risk and actual harm caused when scammers market fake medicines online? That is a particular problem. Operation Pangea has been seizing many such products as they come into the UK, but people need to be aware of the danger of buying from online pharmacies. They need to be sure that they are buying from a reputable agent of the pharmacy industry in the UK, and people can look at logos to check that they are doing so.

[Julian Knight]

I thank my hon. Friend for raising that point. She will have come across that issue in her role as Chair of the Health Committee. As I understand it, such cases are not simply a question of being defrauded of money; they can actually cost people their lives, in the worst possible circumstances.

As well as depressive episodes, 45% of victims suffer a generalised anxiety disorder compared with just 15% of non-victims. The stress that victims suffer can both exacerbate pre-existing health conditions and induce post-traumatic stress, and 10% of victims have unexplained hospital admissions within three months. The circles of these frauds—their effects within our wider society—roll outwards and outwards. More horrifyingly, people who have been defrauded are two-and-a-half times more likely than non-victims to be in care or dead within two years of the event. Scammers take so much more than cash. They can rob us of our self-confidence and elderly citizens of the ability to live independently.

We should not forget the people who fight back. I have enjoyed reading stories of people called scam baiters, who turn the tables on these predators by wasting their time and making fools of them. I particularly liked one story that the BBC covered a few years ago of a gentleman who managed to persuade a Nigerian scammer to daub himself in war paint to prove his dedication to a made-up religion. Overall, however, the clear knock-on effects for personal independence and relationships add huge invisible costs to the headline figures of fraud.

--- Later in debate ---

[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.