Source · Select Committees · Public Accounts Committee
Recommendation 18
18
Accepted
When we last examined the growing threat of fraud in 2017, we concluded that while...
Conclusion
When we last examined the growing threat of fraud in 2017, we concluded that while the Department was the only body that could provide strategic national leadership, fraud had become too vast a problem for it to tackle on its own.37 Fraud has grown since then and the Department is still reliant on voluntary action from industry, including banks and retailers, to identify and design out opportunities for fraud in their systems. The voluntary approach government has taken to working with industry has delivered some successes. For example, the NCA told us that fraudulent websites now appeared far less frequently in paid-for advertising on search engines than they did two years ago. It told us this was due to hard negotiations by the Financial Conduct Authority to persuade Google and others to check that companies are regulated by the FCA before posting advertising from them.38
Government Response Summary
The government agrees with the committee's recommendation and will set out how voluntary charters will contribute to its fraud strategy, including expected changes, timelines, and actions if changes are not achieved, with ongoing implementation until Spring 2025; They have also launched additional charters with insurance sectors by early 2024 and are working on an online fraud charter.
Government Response
Accepted
HM Government
Accepted
6. PAC conclusion: The Department’s reliance on voluntary charters does not produce a strong enough incentive for industry to rapidly improve its response to fraud. 6. PAC recommendation: The Department should set out, as part of its Treasury Minute response, how voluntary charters will contribute to its fraud strategy, including what changes it expects to see as a result of the charters, by when these will be achieved and what action it will take if they are not. 6.1 The government agrees with the Committee’s recommendation. Target implementation date: Ongoing until Spring 2025 6.2 Tackling fraud requires government, law enforcement and different industry sectors to work collaboratively towards the same aim, harnessing expertise, resources and powers. The sector charters provide the necessary structure to turn goodwill into clear actions to support the overall Strategy goal to cut fraud by 10% by end of 2024. 6.3 The department has seen progress since the launch of the first tranche of Charters. All mobile network operators have implemented firewall solutions to detect and block scam texts reaching consumers. Subsequently, 600 million scam texts have been blocked and reports to the 7726 service where these can be reported have fallen by over 85%. 6.4 In 2022, the Payment System Regulator (PSR) closed a consultation to support the actions to prevent authorised fraud and protect customers in the banking sector charter. The government is now introducing measures in the Financial Services and Markets Bill to allow the PSR to mandate reimbursement to fraud victims. The government is also legislating to give banks the power to delay suspicious payments to help prevent fraud. 6.5 The government will publish further charters, including with the insurance sector by early 2024. Work is underway on the Online Fraud Charter, with the government seeking concrete actions on proposals such as improving reporting, data sharing and transparency. 6.6 The government has appointed Anthony Browne MP as Anti-Fraud Champion to drive work with industry and ensure that companies are incentivised to combat fraud and to explore