Anthony Browne is MP for South Cambridgeshire, the Chair of the Conservative backbench Treasury Committee and a member of the Treasury Select Committee.
Scams – or fraud against the individual – are the biggest form of crime in the UK. They amount to 41 per cent – nearly half – of all crime. Research suggests that one in 15 adults is victim of a scam each year. They cause immense financial and emotional distress, ruin thousands of people’s lives, and cost the economy an estimated £7 billion a year. Scams corrode our trust in each other and in legitimate institutions.
They have grown rapidly in recent years because of new technologies that have made it far easier for fraudsters to contact potential victims. When fraudsters had to contact victims through cards left in phone boxes, they were limited in the damage they could cause. But emails, text messages, the internet and social media have changed everything. Now eighty per cent of all crime is cyber-enabled.
Nor is it just chancers in your community trying to take advantage of you. Scams have become a global industry. Around 70 per cent of them are initiated overseas, run by organised criminal gangs. The are well financed and entrepreneurial, with access to advanced technology.
There is an extraordinarily wide range of fraud, from investment scams impersonating legitimate companies to romance fraud, where the scammer tricks someone through a dating website. They range from non-existent products being “sold” on internet market places to so-called authorised push payment fraud where customers are tricked into transferring their own money to a fraudster’s account.
Young people, who spend more time on the internet and social media, are more likely to be victims of fraud. But older people are more likely to lose large sums of money – sometimes their whole life savings.
Unfortunately, the UK is particularly vulnerable to scams. Fraud is growing around the world, but we are probably the prime global target because of our relative wealth (fraudsters go where the money is), our use of the English language (making us accessible to international gangs), our high use of internet and social media, and our instantaneous payments system, which makes it easier for fraudsters to get their ill-gotten gains out quickly. When payments took 24 hours, fraud was easier to stop.
Tackling fraud is an immense challenge, but it is one that the Prime Minister has asked me to take on. He has appointed me the Government’s first Anti-Fraud Champion (an unpaid role), with the objective of putting the fraudsters out of business. It is my job to co-ordinate the battle against the fraudsters across the range of Government departments and regulators, and leading the Government’s engagement with industry, from tech companies to banks, as well as foreign governments.
My appointment is part of the Government’s recently published and well-received Fraud Strategy, the first comprehensive reform of our approach to fraud for over 30 years. It has three broad pillars: enforcement (putting fraudsters behind bars), empowerment (helping people protect themselves) and prevention – stopping scams happening in the first place.
We are setting up a National Fraud Squad with 400 new officers to chase fraudsters, and raising the capacity of local police forces to deal with it – though we recognise we are never going to arrest ourselves out of fraud. We will have a co-ordinated campaign to raise public awareness of fraud, but the public cannot be expected to be in a state of eternal vigilance.
The biggest wins will come from blocking fraudsters from committing their crimes: stopping the scams in the first place. We are using every tool in the toolbox – from voluntary action and regulator-backed codes of conduct, to legislation backed by major fines.
We are not starting from nowhere. Mobile phone companies are already required by the regulator Ofcom to filter out scam texts (so called smishing). They have blocked 600 million so far, and data suggests that the number of scam texts is falling. But there is more that can be done to strengthen the firewall to stop all scam texts.
We are completing legislation that will force all banks to compensate victims of fraud, unless they showed gross negligence (the current compensation regime is voluntary and patchy). When it is passed, the Online Safety Bill will put a legal requirement on tech platforms to stop scam advertising. This will be detailed in a code of conduct from Ofcom, who will have the power to fine companies up to 10 per cent of turnover if they do not comply. After some arm-twisting, almost all online platforms have already started blocking advertising of financial products that are not from companies regulated by the Financial Conduct Authority. This has led to a sharp drop in advertising of investment scams on Google.
In the Fraud Strategy, we are going much further. We are banning all cold calling of all financial products – so if someone phones you up pushing a great investment, you know for sure they are fraudsters. We are banning so-called “sim farms”, devices that enable fraudsters to do mass texting, for which we believe there is limited legitimate use.
We are already curbing so-called “number spoofing”, where a caller pretends to come from a different phone number, so that someone overseas can pretend to be phoning from within the UK, or someone in the UK can pretend to be calling from your bank. But we are going further, bringing in a new technology enabling Caller Line Identification Verification, which means phone companies can comprehensively stop all illegitimate number spoofing.
We are looking at how to put some grit in the payment system, letting legitimate businesses enjoy instantaneous payments, while slowing down suspicious payments to give time for banks to investigate, and for individuals to get their money back. We are replacing Action Fraud, where victims can report scams, to make it fit for purpose.
One of the key challenges is to get the tech sector to accept their full responsibility for tackling fraud. Most companies are doing something, but often with little enthusiasm and limited results. We will in due course be publishing data on the origination of scams – so we can see how much fraud there is on each platform, naming and shaming the worst offenders.
I have started meetings and roundtables with tech firms to negotiate an online fraud charter, getting internet firms to commit to a series of further actions to stop fraud. They need to do more to check the identity of advertisers, to warn users who have been approached by fraudsters, and to make it easier for users to report scams. We need far better data sharing between tech firms, as well as other sectors such as financial services and law enforcement, to do more to identify, block and catch fraudsters.
We have also started negotiating with foreign governments to get a more co-ordinated global response, both on the policy side and on law enforcement. It appears that we are doing far more than any other government, and it would be good to share best practice. The UK may be more prone to scams than other countries, but my aim is that we will also be better as stopping scams.
There is no single silver bullet that will kill off this global threat. But I am confident that with determination, we can put the fraudsters out of business.
