Parliamentary Committees and Public Enquiries
Treasury Committee publishes Government response to fraud, scams and economic crime report
The Treasury Committee yesterday published a responses from the Government, Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) to its report on Economic Crime.
- Government Response: Economic Crime: responses to the Committee’s Eleventh Report
- Read an interactive summary of five of the committee's key recommendations: Economic crime is a growing problem (Shorthand)
- Inquiry: Economic Crime
- Treasury Committee
The report, published in February, urged the Government to legislate against online fraudulent adverts and seriously consider whether online giants should reimburse those who fall victim to scams on their platforms. It also called for the Government to urgently legislate to make reimbursement for victims of ‘authorised push payment fraud’ mandatory.
In a series of recommendations, the report called for law enforcement to be appropriately resourced to tackle the scale of the problem, for the Government to consider whether a single law enforcement agency with a clear responsibility to fight economic crime would be more effective, and for higher company formation fees and Companies House reform to prevent fraudsters from hiding their identities behind UK businesses.
In response, the Government outlines that they are in the process of creating a second Economic Crime Plan, to be published later this year, and appears open to Companies House reform, including the raising of company formation fees.
However, the Government dismisses the suggestion that anti-fraud enforcement should be the responsibility of a single body or department.
Commenting on the response, Rt. Hon. Mel Stride MP, Chair of the Treasury Committee, yesterday said:
“While it’s welcome news that the Government has now decided to legislate against online fraudulent advertisements in the Online Safety Bill, introducing new legislation takes time, and, in the meantime, innocent consumers remain at risk of falling victim to scammers. Online platforms must now step up and urgently take down these fraudulent adverts.
“The government has stated that lots of work on combatting fraud is in train, and it places much emphasis on its upcoming Economic Crime Bill. However, it appears to dismiss our recommendation for the creation of a single law enforcement agency with responsibility for fighting fraud and a single Government department tasked with overall responsibility in this area. This may be a significant missed opportunity.”
The report contained the following conclusions and recommendations:
- The Government should consider whether there should be a single law enforcement agency with clear responsibilities and objectives to fight economic crime.
- The Government must consider why economic crime seems not to be a priority for law enforcement, and how it can ensure it becomes one. It must ensure that law enforcement agencies are appropriately resourced to tackle the scale of the problem.
- The Draft Online Safety Bill should be amended to include fraud offences, requiring online firms to be proactive rather than reactive in removing it from their platforms.
- The Government should seriously consider whether online companies should be required to contribute compensation when fraud is conducted using their platforms.
- The Government should urgently legislate to make reimbursement for victims of authorised push payment fraud from financial services firms mandatory.
- There are increasing risks around cryptoassets and economic crime and, while we welcome news that the Government will legislate to bring advertising of cryptoassets into line with that of other financial services and products, the Government should ensure there is proper consumer protection regulation across the whole cryptoasset industry.
- The low costs of company formation present little barrier to those who wish to set up large numbers of companies for dubious purposes. The UK should be charging fees similar to those in other countries. The Government should significantly increase the costs of company incorporation. A fee of £100 would not deter genuine entrepreneurs and would raise significant additional funding for the fight against economic crime.
Original article link: https://committees.parliament.uk/committee/158/treasury-committee/news/166100/treasury-committee-publishes-government-response-to-fraud-scams-and-economic-crime-report/
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