MPs warn of failings to tackle online fraud

In a report published today, the Public Accounts Committee has warned that banks, the government and some police forces aren’t doing enough to tackle the growth of online fraud.

Drawing on Which? Research, the Committee and made six key observations and recommendations:

1. Banks don’t accept enough responsibility for preventing and reducing online fraud and there is no data available to assess how well individual banks are performing.

Recommendation: the Home Office should set minimum standards for banks to follow in preventing online fraud and protecting bank customers, requiring banks to report to the government on their performance. The Department should press the banking industry to make relative online fraud vulnerability performance data publicly available.

2. Unless all banks start working together, including making better use of technology, there will be little progress on tackling card fraud and returning money to customers.

Recommendation: working with Joint Fraud Taskforce partners, the Home Office should make sure all banks to make better use of technology and information to reduce card fraud and return money to customers. This should include establishing minimum technical standards for strong customer authentication for electronic payments.

3. The Committee isn’t convinced that the current awareness campaigns, such as the government-backed Take Five campaign, are effective.

Recommendation: the Home Office, working with others in the Joint Fraud Taskforce, needs to develop a more informed approach to its education campaigns. Campaigns need to be specific about achievements, evaluating what works best and looking at opportunities for campaigns more targeted at specific groups.

4. The Home Office hasn’t yet put in place effective arrangements for its oversight of a coordinated and effective response to online fraud and for reporting on its progress.

Recommendation: the Home Office should develop specific plans on how it will measure progress in tackling online fraud and judge the success of the Joint Fraud Taskforce, and it should regularly publish information on progress and performance.

5. The Home Office lacks data to judge whether its response to tackling online fraud is working.

Recommendation: the Home Office must prioritise efforts to improve the collection and reporting of data on fraud. It should update us on progress by the end of March 2018, when we also expect to hear how it is improving information sharing between government, industry and law enforcement and working with Action Fraud to reduce the gap between reported and actual fraud.

6. The response to tackling online fraud is variable across different police forces.

Recommendation: the Home Office should, with the City of London Police, establish what more they can do to help all police forces tackle online fraud, including opportunities to identify, develop and share good practice in a more systematic way.

The report noted that online fraud is now the most common crime in England and Wales, costing an estimated £10bn a year.

Our money expert, Gareth Shaw, said:

‘It is right that the Public Accounts Committee is treating online fraud with such severity, as we know first-hand the devastating impact it continues to have on consumers.

‘We need to see real progress from the Joint Fraud Taskforce on this issue and for the banks to urgently introduce measures to compensate victims and stop these scams from happening in the first place.’