Online fraud costs estimated £10 billion per year
Online fraud is now the most prevalent crime in England and Wales, impacting victims not only financially but also causing untold distress to those affected.
The cost of the crime is estimated at £10 billion, with around 2 million cyber-related fraud incidents last year, however, the true extent of the problem remains unknown. Only around 20% of fraud is actually reported to police, with the emotional impact of the crime leaving many victims reluctant to come forward.
The crime is indiscriminate, is growing rapidly and shows no signs of slowing down. Urgent action from government is needed, yet the Home Office's response has been too slow and the banks are unwilling to share information about the extent of fraud with customers. The balance needs to be tipped in favour of the customer.
Problem too vast for home office to solve alone
Online fraud is now too vast a problem for the Home Office to solve on its own, and it must work with a long list of other organisations including banks and retailers, however, it remains the only body that can provide strategic national leadership.
Setting up the Joint Fraud Taskforce in 2016 was a positive step, but there is much still to do. The Department and its partners on the Joint Fraud Taskforce need to set clear objectives for what they plan to do, and by when, and need to be more transparent about their activities including putting information on the Home Office’s website.
The response from local police to fraud is inconsistent across England and Wales. The police must prioritise online fraud alongside efforts to tackle other sorts of crime. But it is vital that local forces get all the support they need to do this, including on identifying, developing and sharing good practice.
Banks not doing enough and response not proportionate to problem
Banks are not doing enough to tackle online fraud and their response has not been proportionate to the scale of the problem. Banks need to take more responsibility and work together to tackle this problem head on. Banks now need to work on information sharing so that customers are offered more protection from scams.
Campaigns to educate people and keep them safe online have so far been ineffective, supported by insufficient funds and resources.
The Department must also ensure that banks are committed to developing more effective ways of tackling card-not-present fraud and that they are held to account for this and for returning money to customers who have been the victims of scams.
Comment from Committee Chair, Meg Hillier MP:
"Online fraud is a virulent and unprecedented threat that has taken hold rapidly, causes untold misery and costs individuals and businesses billions of pounds each year.
The Government accepts there is an enormous amount of work needed to tackle the problem—work that in our view must put people first. Banks in particular need to step up, take responsibility and focus sharply on protecting and informing their customers.
Technology is clearly critical to combating cyber-crime, and developing effective common defences should be a priority. Policing must also be more consistent. Government has a vital role in ensuring this happens.
Meanwhile, the public cannot be left in the dark. Online fraud affects people of all ages and backgrounds. Young people are increasingly likely to fall victim to a crime which is perceived primarily as affecting the elderly and vulnerable.
The Government must get better at explaining the tricks employed by fraudsters to target different groups, and set out clearly the action it is taking to tackle them."