Telecommunications Fraud: Reimbursement of Victims

Question

15:08:00

Asked by

To ask His Majesty’s Government what steps they intend to take to ensure that technology and telecommunication firms contribute to the cost of fraud prevention and the reimbursement of victims of fraud that arises on their platforms.

Through regulation, including the Online Safety Act, companies are now required to stop fraudsters abusing their business models. All parties with a role to play should prioritise tackling fraud, including the tech and telco sectors, which are key partners in the prevention of fraud. However, more can be done, and further action will be set out in the Government’s forthcoming fraud strategy.

My Lords, I thank the noble Lord for that Answer. As noble Lords will be aware, banks now have to reimburse fraud victims. However, according to the PSR, over 70% of scams by volume originate online, 54% from Meta alone, and 31% of scams by value originate from telecoms companies. Yet, despite facilitating most of the scams, technology and telecoms companies have no liability for the losses and are subject only to voluntary charters. Indeed, one large telecoms company—let us name it: BT/EE—has started to charge extra to warn people that calls or texts might be a scam. The voluntary charters are clearly not working, so does the Minister agree that tech and telecom companies will take serious action only if they have a real financial liability for the losses, just like the banks do? Does he also agree that it is a disgrace that a company such as BT/EE is profiteering from scams, and will he take action to stop that before the others follow?

I will certainly look separately into the noble Lord’s question in regard to BT and so on. He will be aware that since March 2025, Ofcom’s illegal content code of practice has come into effect. That means that platforms such as Meta and the others he has mentioned, which contribute through hosting illegal activity and significant levels of fraud, now have a mandate to proactively stop and remove fraudulent content, or else they will face fines and other potential measures. The noble Lord mentioned the disparity between the banks and the platforms. We have the Online Safety Act, which has only just come into effect, and we have potential areas to look at in the fraud strategy. I am aiming to publish the fraud strategy at the end of this year and early next year at the latest. We are working through that currently, and I keep all options open.

Is the Minister aware that there are still too many rural areas in the United Kingdom where the reception, both telephonic and in respect of all other modern machinery, is not viable? Will he therefore call in the senior directors of those companies to make sure that the push that is supposed to be happening is actually happening on the ground?

I will certainly look at that point. It is not within my direct responsibility, because this Question is about fraud. I live in a semi-rural area in north Wales myself and those issues are important, but they are not directly Home Office responsibilities. If the noble Lord will allow me, I will refer that matter to the appropriate Minister for somebody else to call in—I have enough people to call in on my own.

My Lords, does the Minister agree that it is about time that we treated social media as publishers and held them to the same account as we would do newspapers, et cetera? We have 14 years of lack of action on this. Should not the Government look at this again and try to deal with the problems that have just been raised?

My noble friend can rest assured that under the Online Safety Act, which passed with an element of cross-party support but which has now been implemented by this Government, we have put in place stringent standards whereby, if illegal, harmful and fraudulent content is hosted by companies and they do not remove it when requested to do so, they will face fines and penalties which are severe. As I said to the noble Lord, Lord Vaux, we intend to keep that under review. We intend to look at how it is working, and if it is not working to a satisfactory level, we will take further action in the forthcoming fraud strategy paper that will be produced towards the end of this year.

My Lords, Facebook’s removal of fact-checkers from its platforms leaves people even more exposed, with a new person scammed every seven minutes. To make matters worse, Ofcom decided to delay implementing its codes of practice for paid-for fraudulent advertising. Does the Minister share my concern that this decision by Ofcom means that key parts of the Online Safety Act will not be fully enforced until at least 2027?

The noble Baroness has mentioned the fraudulent advertising duty, which, again, is a key part of the Online Safety Act. Ofcom assures me that it will consult very shortly, towards the summer, on codes of practice that will look at the very issue that she has mentioned—the advertising duty—with an aim to publish the final advertising codes around this time next year.

My Lords, fraud of this kind targets some of the most vulnerable people in our society and causes considerable emotional as well as material harm. Given that 70% of fraud in the UK either originates overseas or has an international link, can the Minister update the House on how the Government are working with other countries to make sure that those abroad who are targeting people in this country are stopped?

Absolutely; that is an extremely valuable point. Again in the upcoming fraud strategy, we will look at a number of countries from which fraud emanates. We have put just under £1 million into supporting the United Nations conference on this very issue, which will be held next year; the UK is leading the charge on that. For those noble Lords who may have missed me, a couple of weeks ago I spent four days in Nigeria dealing with the Nigerian Government and, with them, signing a charter to look at joint co-operation on fraud that emanates from both our country and theirs collectively; that is the first of a number of charters and codes of practice that we will look at with other countries. This is an extremely important point: there are certain areas from which fraud emanates very strongly. We need an international response to what is an international criminal gang operation.

My Lords, I recollect that, when I was a member of the special Select Committee on fraud, we had the privilege of hearing evidence from a representative of the company that was providing me with mobile telephony. Of course, the first sentence of the evidence that they gave was, “We take this issue very seriously”. I had in fact spent five hours, on a train from Scotland, reading the terms and conditions of my contract with the company; I suspect that no other Member of your Lordships’ House has done that. The word “fraud” appeared nowhere in the contract that I had with it. It would be simple for providers to make it clear to those to whom they give the privilege of using their system that, if they use it for fraud, not only will the contract be terminated but all other mobile providers will be told that they have that background. When we revise the fraud strategy, can we insist that that simple requirement is made of mobile providers?

One key area that we are focusing on in the revised fraud strategy is data sharing. I want to ensure that telecoms companies, telecommunications providers, platforms, the police and others share data where there is fraudulent activity. I hope that Members will bear with me but, when the fraud strategy comes out in due course, data sharing and how we can improve it will be one of our key aims as a Government.

My Lords, I am glad that the Minister mentioned data sharing because, obviously, a lot of scams and fraud come through nuisance calls and texts. There is a no man’s land, as it were, between Ofcom and the Information Commissioner’s Office, so it vital that those two regulators work closely together. I hope that, as part of the fraud strategy, the Minister will illuminate how closely those two regulators are working together and perhaps commit to regular reports on how they are cracking down on nuisance calls and texts, which companies they are closing, whom they are fining and what impact they are having.

Absolutely. I am keen on having not just data sharing but data metrics and performance in the fraud strategy. The noble Lord’s point is extremely valid. There is a lot of good talk, but we need to measure action.

My Lords, does the Minister agree that, if we had ID security on a cyber basis, much of this fraud would be diminished and would disappear?

The noble Lord makes an interesting point; if he will let me, I will take it as a representation for consideration in the fraud strategy. The Government are keen to look at any measure that will reduce the level of fraud, which currently accounts for 41% of all crime; that impacts on businesses, on consumers, on government and, ultimately, on confidence and growth in our economy. Fraud is extremely important; I will examine the noble Lord’s suggestion.