Scam Mailing

Andrew Bingham Excerpts

Wednesday 30th January 2013 Westminster Hall

[George Hollingbery (Meon Valley) (Con)]

It is a pleasure to serve under your chairmanship, Mr Sheridan. I congratulate my hon. Friend the Member for South Derbyshire (Heather Wheeler) on securing the debate. I have worked closely with her on a number of issues, and we sat together on the Communities and Local Government Committee. She is a passionate defender of her constituents’ interests. I readily admit that my expertise in this area is not the same as hers, and I certainly will not go into the issues in such depth, but a number of my constituents have been hit by mail scams and it is important to attempt to do something about them.

According to Office of Fair Trading research, 48% of the UK population has been targeted, and 3.2 million people fall victim to scam mailings every year, particularly the most vulnerable in our society.

[Andrew Bingham (High Peak) (Con)]

I congratulate my hon. Friend the Member for South Derbyshire (Heather Wheeler) on securing this important debate. Does my hon. Friend the Member for Meon Valley (George Hollingbery) agree that it is often the elderly who are targeted and victimised by the scams? There are many different forms of what I call snail mail marketing, and the scams get lost in the middle of that. They are well hidden, and in my experience the elderly are particularly vulnerable.

[George Hollingbery]

That is plainly the case. In my experience, and my hon. Friend the Member for South Derbyshire also made this clear, it tends to be the older and less mentally robust who are scammed and are subjected to repeat versions of the same thing. Their names get on a list and they are targeted again and again.

The estimated annual cost of scam mailings to the economy is some £3.5 billion. The citizens advice bureau in Bishop’s Waltham in my constituency has brought a number of such scams to my attention, and one of them, involving missed delivery cards, caught my eye. The scam is not of the same nature as one that says, “You will send in a cheque,” or one that asks someone to send money directly back. This one is allegedly from a well-known delivery company, and it asks people to confirm that they want the delivery to be remade by calling a particular number. On the card, rather than an address from which to pick up the parcel, there is a telephone number. It turns out to be a premium rate number of a telephone company in Belize, which someone would be charged £315 for the pleasure of calling. Many of the scams are so sophisticated that they are extremely easy to fall for, especially for someone who does not get out or read the newspapers often and is not aware that such things exist. That case highlights one of the biggest challenges in stopping mail scams: the majority originate abroad, and it is nigh on impossible to prosecute or stop them as there is no UK-based business to have a go at.

There is a great deal of work taking place. Hampshire county council has concentrated on the matter, hence the involvement of my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes). The council has established a special trading standards safeguarding unit, which works closely with its partner agencies to help protect vulnerable adults, provide flexible support to victims of fraud and raise awareness through information designed to educate, support and guard against further financial abuse. It has raised awareness through working closely with the media and community groups, and by drafting articles for newsletters, newspapers and generally circulated public communications. Extra training has been given to all staff in adult services and other agencies so that, for example, when staff visit a home and are greeted with a mountain of post they can consider whether the person there might be the victim of scam mailing.

Working in that way has enabled Hampshire county council and adult services to identify several chronic scam victims. This is not something that only Royal Mail or the Government can deal with; local authorities can have a positive input. The council also works closely with a local business that provides a mail and package forwarding service to consumers and businesses outside the UK. The business raised concerns with trading standards after large amounts of mail were returned to it undelivered. With that help, more than 200 envelopes full of cash and cheques from the US were discovered, which helped to end an American mailing scam. Hampshire trading standards has a good working relationship with money supply bureaux, and it highlights concerns about individuals who regularly make overseas transfers to unknown individuals or organisations. There is by no means a single point of contact or a single solution; many different hands can get involved.

I absolutely believe that the Government take the matter seriously. The Prime Minister answered a question during Prime Minister’s Question Time from my hon. Friend the Member for Romsey and Southampton North on, I think, 11 November, and he has announced a series of changes designed to get to grips with the problem. The Office of Fair Trading has invested £7.5 million to create scambuster teams and run awareness campaigns, and the Government are also in the process of creating a dedicated team within the National Crime Agency, when it is established, aimed at tackling the problem. The work is therefore ongoing, but I believe we have a responsibility to look even more closely at the matter and consider whether there is anything more that we can do to target the problem.

My hon. Friend the Member for South Derbyshire has covered many of the solutions that Hampshire county council would like to employ, but let me repeat them anyway. The council believes that we need additional protections in law to help to safeguard potential victims, and my hon. Friend the Member for Romsey and Southampton North introduced a private Member’s Bill in January 2011, which unfortunately ran out of time. For colleagues who have not seen that Bill, she argued that the police, customs officers or the National Fraud Authority should be able to intercept mail if they believe it is scam mail. The county council also believes that Royal Mail should disclose the details of potential scam victims to trading standards so that proper support can be offered to financially abused and vulnerable people.

Further questions arise: how do we stop scam mailing and not direct marketing? Can the issue more effectively be tackled by changes made by Royal Mail rather than the Government? Are there data protection issues that need to be considered? Are changes in the law required? I wonder whether it is possible to beef up the existing mail preference service, or whether Royal Mail can improve its safeguards to address the problem better. A moment or two ago, it occurred to me that it might be possible for families and/or vulnerable adults to have some sort of opt-in system, so that they give permission for their mail to be examined. That might be one of the easiest ways forward, to have a permissive regime under which potential scam victims can say, “I don’t mind my mail being looked at.”

I appreciate that this is a tough issue and one that is very difficult to resolve, but I do have some questions for the Minister. Is there a lead person in Government who is pulling together the key actions designed to address the problem better? Is the Government’s view that it is Royal Mail that needs to put a renewed emphasis on reducing the problem, or is it essentially a Home Office issue? How do we stop the problem falling between two stools in government? If there is not one person with whom responsibility sits, we run the risk of the issue being forgotten about and its dropping through the cracks in the floor.

I appreciate that this is strictly outside the Minister’s portfolio, but when the Prime Minister spoke to my hon. Friend the Member for Romsey and Southampton North about the issue back in November, he said that a team was being created at the National Crime Agency to deal with it. Is the Minister able to update us on the plans to create that dedicated team? I understand that it is not directly within her portfolio, but if she has any news I would gratefully receive it. What I do know for sure is that the message needs to go out loud and clear that scamming vulnerable people for cash is deeply cruel. There is more that we can and must do about it, and we must do it soon.

--- Later in debate ---

[Andrew Bingham (High Peak) (Con)]

It is a pleasure to serve under your chairmanship, Mr Sheridan. I am grateful for the opportunity to make a contribution, because I did not give notice of my intention to speak. I came to listen, but I have heard one or two things on which I would like briefly to comment.

Many of us have had people in our surgeries with scam mail problems. I want to address scratchcards and premium-rate numbers, which have already been mentioned by my hon. Friend the Member for Meon Valley (George Hollingbery). Those things have at the bottom, “Phone this number for untold riches.” Telephone numbers are changing. At one time, people could spot an STD—a subscriber trunk dialling—code, and if they were a bit sad like me, they could remember the places the codes were for. Now codes begin with 09 or 08 and people never know what they will be charged. The elderly and the vulnerable see things that say, “Phone this number to claim your prize. There are six prizes. One is a car, and one is a holiday.” As has been said, they are suddenly through to a phone number halfway round the world and they get a phone bill of £300, £400 or £500 many weeks later. That is a real problem. It is not only mail fraud that is becoming more prevalent, but e-mail fraud too.

Scratchcards are also an issue. They come in the post and in magazines. People look at them, and they seem wonderful, but I always try to find the flaw in them. If someone is aware, they can see that these things are a scam, but many people just see them and think, “This is fantastic.” I completely agree with what the hon. Member for Ceredigion (Mr Williams) said: if it looks too good to be true, it is. That is what I always say to my constituents, but, unfortunately, by the time they come to see me it is too late, because they have the bill and it has to be paid. It is a real problem.

The other scam I have started to see—it is done more by e-mail—is a message that someone has a package waiting. On the face of it, it looks like a completely legitimate courier has a package for the recipient. I had one of these e-mails once when, ironically, I was actually waiting for a package. The e-mail dropped into my spam folder, however, so I knew that it was not about my package. That is another way that these people are digging into the vulnerable in our society and the people who cannot afford these things. It is wrong whether the person has the money or not, but the people who are being targeted can ill afford to pay out these fraudulently demanded sums.

I have seen people affected by the problem, and their first emotion is anger that they have lost the money. Then they move on to a sense of shame and foolishness. People who have been done this way feel somewhat foolish and do not tell other people, because it makes them feel a little more foolish. Consequently, word does not go around to watch out for the scam. It is great that my hon. Friend the Member for South Derbyshire (Heather Wheeler), who is a near neighbour, has secured this debate, because it gives the issue publicity and lets people know that if they have been conned, they are not on their own. They should not feel ashamed or foolish. They should tell us and tell other people, because the more oxygen of publicity we can give the problem, the better chance we have of fighting it without bringing in legislation to stop it. This is a terrible and wicked crime that preys, as I have said, on the most vulnerable. If the Government can bring forward anything to stop it, they should look to do so as soon as possible.

[Ian Murray (Edinburgh South) (Lab)]

It is a great pleasure to serve under your chairmanship for the first time, Mr Sheridan. It is always a great pleasure to be in your company.

I congratulate the hon. Member for South Derbyshire (Heather Wheeler) on securing this Westminster Hall debate. She is a good campaigner in the House, and today has emphasised how good a campaigner she is. Hopefully the debate will kick-start a process that will achieve some results on this serious issue. It is distressing not only for the victims and their families but for everyone concerned. I share the concerns that the hon. Lady expressed in her opening remarks.

As all those who have spoken have said, we have all had constituents who have been affected. Some of us have had personal experience of this problem. I was scammed when booking a holiday not too long ago. It looked as though it was a legitimate holiday company registered with the air travel organisers’ license scheme, but it was merely an online scam. It can be difficult to unwind such a process.

Many hon. Members will remember the 2008 survey conducted by Age UK and Barclays, which revealed that seven out of 10 older people in Britain—that is roughly 7 million people—are targeted by scams every month, either by telephone or letter. It is worth reflecting on what the Office of Fair Trading survey said. The hon. Member for Meon Valley (George Hollingbery) mentioned the £3.5 billion that is lost to scams every year, which equates to £70 for every adult in the UK. That is a massive amount, particularly considering family budgets. The average detriment in a scam is well over £1,000—about £1,200—which shows the scale of the problem.

The OFT survey in 2010 found that around one in 11 —just over 4 million—people said that they had responded to a scam at some time in their life, nearly a third of whom lost money. One in 25, or about 2 million people, had responded to a scam in the previous 12 months. Around half of those scammed have lost more than £50 in total, with 5% claiming to have lost more than £5,000. Three in 10 adults who responded to a scam received further correspondence from the scammer, with more than half being asked to send money and more than a third being asked to send personal information. Those statistics are pretty stark. They show the sheer scale of the problem and the effect it has across every constituency.

Of course, it is not a new practice. I thought I would reflect on the issue in the way the hon. Member for North East Somerset (Jacob Rees-Mogg) would and take us back to when we first find any information on scamming. The first mail fraud dates back to 1660, when King Charles II of England first issued orders regarding postal carriers. Some corrupt letter carriers had taken to pocketing the money that was supposed to pay for the letter’s transport and then delivering the letter anyway, because that was what they were supposed to be doing. Mail scams are nothing new, and I hope the Minister can give us some hope, 400 years later, that we have seen the end of the mail scamming system.

In the present day, as well as sending scam mail by post, scammers are taking to new methods to target people young and old, including phishing e-mails and scam adverts on social networking sites. I know the debate is on scam mail, but it is worth reflecting that the scammers are becoming more sophisticated. The hon. Member for South Derbyshire asked us to look at mail in particular, but we need to update the legislation on social networking and the internet. The work that has been done by the Think Jessica campaign on that deserves great tribute.

Once someone is drawn in by a scam mail, they are often put on a “suckers list”. We have seen some of those suckers lists when scammers have been caught. The language used in scam mail is enticing, saying, “You are a guaranteed winner”, “This is a time-sensitive document”, or, “Reply immediately to release your award”. Various other slogans and logos are also used to entice people in for the first time. The scammers are looking for the first indication that someone may be capable of being scammed. They are not interested in the person who throws the message in the bin or puts it in the junk e-mail box. They are interested in grabbing that little bit of hope that they can take the scam forward.

The hon. Member for Meon Valley mentioned bogus prize draws, lotteries and premium-rate prize promotions. Many of those promotions come with some of our national and local newspapers, as the hon. Member for High Peak (Andrew Bingham) said. Perhaps we should tell the editors of those newspapers that we do not accept that.

[Andrew Bingham]

The hon. Gentleman is absolutely right. The newspaper supplements come in a plastic bag for the simple reason that when the bag is opened and its contents are given a shake, a cascade of different things fall out. Many of them are legitimate, but among them are these scratchcards with super-premium-rate phone numbers.

[Ian Murray]

I appreciate the hon. Gentleman’s intervention, which emphasises part of the problem. I have experimented with a few Sunday newspapers by scratching off all the cards to see if I have ever not won. Given that the chances of winning the national lottery are 14.5 million to one, it is quite exceptional to pick up a Sunday newspaper and win on every single premium-rate scratchcard. That shows how people can be drawn in.

When Labour was in government, we recognised that the consumer regime needed to be more effective at stopping rogues, criminals and those who deliberately set out to defraud consumers, especially the elderly and vulnerable, through scam mailing. I am sure the Minister will respond positively to the patchwork of legislation that the hon. Member for South Derbyshire has laid out.

In government, Labour invested £7.5 million to create scambuster teams across the UK. Those specialist trading standards teams work hard with local police and others across local authority boundaries to come down hard on the worst scammers. The cross-boundary aspect of those teams’ work is absolutely essential, because trading standards teams generally find it difficult to work across local authority boundaries. Since 2006, the project has uncovered £55 million in fraud, saved consumers £23 million, seized £16.5 million in criminal assets and jailed 58 mail scammers for a total of 75 years. That is a good record, but not good enough, and the massive increase in scams, and the things that we have heard today, show that more is needed.

We strengthened the powers of the Office of Fair Trading, and of trading standards, with the implementation of the Consumer Protection from Unfair Trading Regulations 2008. Those regulations banned all types of unfair selling and marketing methods, and, crucially, are enforceable through both criminal and civil courts, to ensure that appropriate action is taken against prolific scammers and to serve as a deterrent. However, as we have heard, the regulations are not really serving as a deterrent, given the stories that have emerged since this debate was announced about people moving on to new scams when one is closed down.

The Government’s commitment to further scambusters funding in December 2010 was welcome, but teams in the south-eastern region, which includes London and East Anglia, have been disbanded. Has the Minister assessed the effect of that on the ability to tackle scams and scam mailing? It would be interesting if she would explain whether scambusters funding will continue.

Sadly, people involved in scam mailing have never had it so good. The economic backdrop of stagnant wages and rising prices has made consumers more anxious to save every penny or earn more money. Sometimes, that has resulted in an explosion of money-making scams and sharp practices disguised as sources of help. In addition, we cannot deny that the Government have squeezed funding on consumer protection, and particularly trading standards, with an average 19% cut in overall local authority funding from central Government. The Trading Standards Institute has done an analysis of the aggregate amount of funding for consumer protection through trading standards. The projections are that from £250 million in 2010, the aggregate throughout the country will fall to £140 million by 2014. That significant drop gives scammers the opportunity to enter markets where they may not have been before.

It is important to consider the restructuring of the consumer landscape, which the hon. Member for Ceredigion (Mr Williams) mentioned. The consumer protection powers of Consumer Focus have been passed to Citizens Advice, and there is a worry that that transfer to an organisation of a different kind, with different philosophies and a different set-up, might undermine some of the great work that Consumer Focus did on the issue. The OFT operated an awareness campaign called Scamnesty in partnership with 129 local authority trading standards services. That was to increase consumer awareness of mass market scams and provide consumers with practical advice on how to avoid being scammed.

Perhaps that is one of the most important things that is needed as a result of the debate. Yes, there are legislative and parliamentary responses, but awareness is also needed of ways in which consumers can protect themselves in the first place, and how they can recognise scam mailings or phishing e-mails if they receive them. I received one such e-mail yesterday, apparently from Her Majesty’s Revenue and Customs, which said I was due a tax rebate. I know that that is not true, but the temptation to click on the link and get money back from the Chancellor of the Exchequer was incredibly tempting. The fact that Departments are being shadowed for the sending out of scam e-mails is a great worry, particularly at a time of year when people are filling out tax returns and may expect e-mails or correspondence from Departments, and particularly HMRC. The amount was only £194.70, if anyone is interested—but far better it should be in my pocket than the Chancellor’s.

It is important for people to be on their guard, and to know that help is available. Scams can bring misery to victims, and we need to remind constituents of several things that the OFT highlighted in its report. It is worth reading them, to raise awareness:

“Stop, think and be sceptical. If something sounds too good to be true, it probably is.

Do not be rushed into sending off money to someone you do not know, however plausible they might sound and even where an approach is personalised.

Ask yourself how likely it is that you have been especially chosen for this offer—thousands of other people will probably have received the same offer.

Think about how much money you could lose from replying to a potential scam—it’s not a gamble worth taking.”

It is also worth reflecting on the constituency case raised by the hon. Member for South Derbyshire about a gentleman who became addicted, and how that issue might fit into legislative change. The data protection issues, and requirement for the Home Secretary to obtain a warrant, are valid only if the individual in receipt of the mail would not complain that their rights were infringed. I wonder if in the hon. Lady’s example the poor old gentleman would complain that he wanted to receive the mailings—what he called his investments. They might be costly, but perhaps he was willing to do it for entertainment.

It is worth highlighting the mailing preference service, which the hon. Member for Meon Valley mentioned, by which constituents can have their details removed from mailing lists to reduce the amount of addressed advertising literature that they receive. The MPS does not cover unaddressed mailings, of course and I suppose that the real problem with it is that people who are willing to scam completely forget it exists, so that all it does is remove legitimate people who want to send mail. However, if someone is registered with the MPS and receives mail that they think is a scam, their awareness may be heightened.

The Royal Mail door-to-door opt-out scheme includes unaddressed mail. Has the Minister reflected on the matter, and will she embark on an awareness campaign in conjunction with Royal Mail? The Foreign Secretary has just said in the House that we do not spend money on advertising these days, and he is probably right to say so, but I wonder whether there is any way in which Royal Mail could help with the process.

I want to touch briefly on the matter of e-mail scams. Surveys show that 73% of adults in the UK have received a scam e-mail in the past year. I think probably everyone in the Chamber has received one in the past week—from people who want to send us bequests, or to tell us that people have died, and so on. That is followed by scams via a letter, at 21%, and text messages at 12%. Social media sites appear to be emerging as a new route for scammers, with 9% of adults having received an approach in that way in the past year. It is not just older people who are the targets, although I appreciate that they are the targets of the physical mail. Young people, with the developments in smartphone technology, and now that many of them have their own bank accounts, are becoming susceptible to scams. I hope that my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) will secure a debate on that, because it would be interesting.

I have some information about phishing e-mails to Wonga customers, and about how people are being sucked in, but it is probably best to leave that for a debate about online phishing. Perhaps the Minister could expand on what the Government are doing to make the public aware of the problems, particularly when they relate to departments such as HMRC. The hon. Member for High Peak raised the issue of such departments being made to look as if they are sending information to constituents, and what we could do to tackle that.

As for mail that is posted, Royal Mail must deliver it. That is not its fault; it is governed by law, and it must do so. I believe we all recognise the importance of strong legislation of that kind, to give Royal Mail the backing needed to deliver its mail door to door. However, could the Government and consumer organisations do more, working with Royal Mail and its union, the Communication Workers Union, and postal workers? Perhaps, while there is an obligation to deliver mail, it would be possible to pick up signs—increased loads, or telltale envelopes—that someone on a particular round is at risk from scam mail, and at the very least deliver an information leaflet, or make the recipient aware. It might be very difficult for the House to change the law on intervening, or intercepting mail, and that is probably right, but there is nothing to prevent the Royal Mail or the postman from putting an information leaflet on scam mailing through the door if it is felt that such mailings are going to that address.

Once scam mail has entered the UK postal system, Royal Mail has a legal obligation to deliver it. However, there has been some criticism in connection with Royal Mail’s “local look” service offered by Spring Global Mail and Royal Mail, whereby letters from abroad bear the Royal Mail postmark and have no trace of their overseas origins. There are concerns about that giving credence to scam mail entering the country. Will the Minister reflect on whether enough is being done at Royal Mail to protect its brand, particularly in connection with organisations such as Spring Global Mail, so that at least those overseas issues can be dealt with?

I want to finish by reflecting on the BBC programme “Inside Out” broadcast a few weeks ago. The programme reported on one company called Emery Ltd, a mail handling company based in Hampshire, which willingly acts as a conduit for European mail scammers. Footage obtained by the BBC programme shows company staff throwing letters from scam victims in the bin. The show’s reporter reads one letter detailing that the victim is 90 years old and in a wheelchair, has had two heart attacks and is diabetic, and querying why they have not received their prize yet. Such letters of complaint were just going in the bin.

It will be crucial to continue to educate and empower consumers to recognise and resist scams. That can be done by key stakeholders working together, and some of the key changes in the consumer landscape that we have discussed will have an impact.

Finally, what is being done to simplify and clarify the law, as the hon. Member for South Derbyshire mentioned at the start of her speech? I conclude back where I started, Mr Sheridan: not by congratulating you on being in the Chair, but by congratulating the hon. Lady on securing this important debate about a problem that blights so many of our constituents.