The Government should require all frauds to be reported by the financial sector. It must also ensure consumers reporting fraud are told clearly how their reports will be used. The reported attitudes of staff at Action Fraud towards victims (as revealed by an undercover reporter from The Times in August) are unacceptable. So says the report ‘Economic Crime: consumers’ by the Treasury Committee of MPs.
On what the Government is actually doing, the committee of MPs complained that a national fraud strategy is only just being implemented, which will include a commitment to improve the police response to fraud. This has taken far too long, the MPs said.
The London Labour MP Rushanara Ali, the committee’s lead member for this inquiry, said: “With scams getting ever more sophisticated, it’s clear that economic crime is a serious and growing problem in the UK. The Treasury Committee’s report examines the scale of economic crime faced by consumers, ways that financial firms are combatting economic crime, how economic crime is investigated, and consumer’s rights and responsibilities.
“To ensure that consumers are protected, it should now be compulsory for financial firms to reimburse money lost to victims of Authorised Push Payment fraud, and they should consider doing so retrospectively. There should also be a mandatory 24-hour delay on all first-time payments, allowing consumers time to consider the risk that they are being defrauded.
“The Government and regulators should take on board all of the committee’s recommendations to enhance consumer protection in the face of this harmful tide of criminal activity.”
As for the time some accounts used in economic crime remain active once intelligence has been received on their potential misuse, the report said that the UK financial sector regulator the FCA should work with financial institutions to ensure consistency across the sector; and recommended that the FCA uses its powers to set a timeframe in which an account must be frozen when evidence has been received by a bank that it is receiving money fraudulently.
Also recommended was a 24-hour delay on all initial or first-time payments, when a consumer about to be defrauded ‘could remove themselves from the high-pressure environment in which they are being manipulated’.
The MPs heard evidence from police, the banking sector, and on the counter-fraud side Mark Tingey, Head of Financial Crime Operations, Metro Bank. An earlier report covered the anti-money laundering and the sanctions regime, in March. For the report in full visit https://www.parliament.uk/business/committees/committees-a-z/commons-select/treasury-committee/.
