Online scamming goes national to threaten consumer protection


According to a new report by MPs, consumer protection is at risk from online technology which helps fraudsters carry out scamming operations.

The Commons Public Accounts Committee has found that advances in online technology are allowing scammers to set up in areas where local authorities, which are responsible for consumer law enforcement, are spending less on consumer protection.

Scamming – onlineThe committee also revealed that the fragmented nature of the current system is working to the benefit of fraudsters, who can target consumers all over the country via the web.

The report explains that 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.

"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."

According to the report, consumers are losing around £6.6 billion every year to bank and card fraudsters and other rogue traders.

This was demonstrated in September, when the consumer watchdog Which? investigated online security and how the UK's major current account providers are performing. Which? found significant variations in the levels of security offered.

Nationwide was found to have the best website, with good login security and logout performance. However, security was poorest at the Norwich & Peterborough Building Society.

Bryan Nott of Simpson Millar LLP is worried that government plans to reduce the work of the Office of Fair Trading and close the Consumer Focus watchdog will not help a worsening situation.

"These proposals, which were announced earlier in the year, are likely to create even greater pressure for the consumer protection system," Bryan said. "Already there are proven to be criminal gangs doing their best to outwit banks and, by association, ordinary bank account and credit card customers."

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