This week ministers set out ambitious plans to tackle the scourge of scams affecting UK consumers.
THE national anti-fraud strategyreleased on Wednesday, it outlines measures the government says will help crack down on common scams, including cold calling and number spoofingthe practice where scammers impersonate the caller ID of trusted establishments to defraud people.
Also featured is more government funding and the promise of having a new anti-fraud service up and running to replace Action Fraud’s poor performance this year.
What prompted the government to act on the fraud?
Fraud, especially computer fraud, is a growing threat to consumers, with the Office for National Statistics reporting that it accounted for around 40% of all crime in England and Wales last year.
Concerned MPs say ministers and law enforcement agencies have overlooked economic crime. Last year, the House of Commons Select Committee on Justice found that only 2 percent of police funding went to the fight against fraud.
Action Fraud, the national fraud reporting service, has also come under particular criticism in recent years due to its underperformance, increasing waiting times and reports of deceived victims. Ministers in 2021 announced plans to replace the service.
How will the strategy help people at risk of being scammed?
The government will work with Ofcom, the telecommunications regulator, to ban cold calling on all financial products to prevent people being pressured into making fake investments. It is also proposed to ban so-called “Sim farms”, used to send thousands of scam messages.
The plans aim to ensure that vulnerable people who avoid online services, especially the elderly, can no longer be targeted by scammers over the phone. The government has already banned personal injury companies and pension providers from making cold calls.
The measures will need to be robust given the financial incentives for criminals to prosecute such scams. Victims reported losses of around £2.35 billion to Action Fraud in 2021. Separately, the Office for National Statistics released figures showing that one in 15 adults fell victim to fraud last year.
Will I be reimbursed if I am a victim of fraud?
The strategy includes plans to ensure victims of push payment authorized scams, where a fraudster tricks someone into sending them a payment, are reimbursed. These scams have become increasingly sophisticated, with banking lobby group UK Finance reporting around £249m lost to APP fraud in the first half of 2022.
Previous plans would have seen social media companies forced to compensate people who have fallen victim to fraudulent content, but the measure was removed after pressure from the industry.
“Self [social media companies] they have not put in place security measures perhaps they should be required to pay compensation,” said Louise Abbott, a fraud specialist at Keystone Law. She said clients often fall for investment scams advertised on social media, with cryptocurrencies a particular challenge.
Abbott said there were pathways to compensation for most types of fraud via banks and the Financial Services Compensation Scheme. However, she said this did not apply to crypto scams, where funds were decentralized and scammers offered anonymity.
How will the changes to Action Fraud affect me?
The Action Fraud replacement is expected to launch later this year with a “new reporting service” and an “upgraded call center.” As a centralized national service, its successor will remain the first port of call for reporting fraud and cybercrime in the UK.
Plans for law enforcement agencies to target low-level scammers will be ineffective, according to Jim Winters, director of economic crime at Nationwide. He said resources should be focused on “boss” management operations.
The intelligence services are expected to take on a larger role in investigating foreign-originated fraud, while 400 “specialist investigators” will be recruited as part of a new National Fraud Squad.
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