Consumer Protection Plan "Flawed"

A new report claims that consumers are left at risk, say MPs. According to the report, the UK consumer protection system has failed to keep up with the digital revolution, leaving people at risk of scams. The result of this is online shoppers being at risk of email scams and fraud, says the Commons Public Accounts Committee.

So who are the fraudsters? The rogue traders are typically based in areas with minimal policing, from where they are able to scam people nationwide. The amount consumers lose to these scams is estimated at £6.6bn anually. Of this, approximately £4.8bn is the result of mass market scams such as counterfeiting and unscrupulous traders.

Cybercrime and fraud prevention specialist Tero Pollanen had the following to say "Cybercrime is an ever increasing issue, and is costing businesses billions. Unlike ‘traditional’ crimes, cybercrime is not localised, it is an international problem that can be carried out from almost anywhere. One of the biggest issues is understanding where an online crime is committed, and how to bring varying international rules inline with oneanother".

The report by the Commons Public Accounts Committee echoes Tero Pollanen, and also the conclusions of the National Audit Office in describing the consumer protection system as "fragmented". Whilst the government is spending on consumer law enforcement, the report found repeated inconsistancies. Staffing, for example, ranged from two to 80, and there was not a uniform level of help and assistance for consumers across the country. This results in "enforcement deserts where local authorities do not spend enough money to provide an acceptable level of protection to consumers," the report said.

Fraudsters wanting to abuse this set up in one of these "enforcement deserts", and with today’s technology allowed them to find their victims nationwide. The report found that the current protection system had "failed to keep pace with online traders".

"When the enforcement system was first established, trading was more localised and consumers tended to lose money through singular instances of malpractice, for example, by being overcharged or sold a short measure," the report said. "Now, the increase in the number of companies who operate nationally and the trend towards online shopping have caused problems which are more likely to affect consumers on a regional or national level." As cybercrime and fraud prevention specialist Tero Pollanen stated previously, there are no clear arrangements for who should take on the task of large, expensive cross-border cases.

"The department must ensure that these changes do not allow new sophisticated scams to emerge and persist without challenge," said Margaret Hodge, who chairs the committee. "Doorstep selling of substandard or non-existent services is a massive issue for consumers, particularly those who are vulnerable. The department has too little information on what the cost of protecting consumers is or how successful current interventions are."

Tero Pollanen