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Dept of Trade and Industry

Answer

Keith Vaz: To ask the Secretary of State for Trade and Industry (1) if the Government will investigate the effectiveness of measures to prevent fraud in online shopping transactions; [205549] (2) what powers there are to protect online shoppers from fraud; [205550] (3) what steps the Government plans to take to make internet shopping more secure. [210010] Mr. Mike O'Brien: The Government works with the police and industry to tackle fraud and other online crime through a number of initiatives. A key factor in dealing with online fraud is prevention and education and the Government take an active role in educating computer users about the risks of fraud committed through the internet. The Home Office website provides advice on avoiding internet fraud and the Home Office has also created, and maintains the `e-tailing mini site', which forms part of the crime reduction website. The mini site provides information to help both businesses and consumers protect themselves specifically when using the internet. The Consumer Protection (Distance Selling) Regulations 2000 protect consumers against payment card fraud including credit cards. The Regulations apply to contracts made at a distance including online ones. The Card issuer is required to reimburse consumers the full amount in the event of fraudulent use of the consumer's card. In addition, the Consumer Credit Act 1974 also allows consumers to recover the cost of a purchase made by credit card from either the supplier or the credit card provider. This provides additional protection should a consumer be unable to trace the company they were dealing with over the internet. The Banking Code stipulates the consumers' liability for misuse of a card will be limited unless there is evidence that they have acted fraudulently or without reasonable care. Through the Department of Trade and Industry's Safe Internet Shopping initiative consumers have access to information on how to shop online safely. Consumers need to be aware of security features on websites and to look for a closed padlock sign when they are asked for personal details. The Consumer Direct website at www.consumerdirect.gov.uk also offers advice on internet auctions, online scams and information on a range of consumer-related issues. The Consumer Protection (Distance Selling) Regulations 2000 are included in a list of EC Directives, which is part of the Injunctions Directive. The Injunctions Directive requires all member states to have in place arrangements, which will allow certain unlawful actions harmful to consumers to be stopped in good time. The Injunctions Directive allows consumer protection bodies designated by the member states to apply to the courts or competent administrative authorities for orders to require traders to cease conduct that constitutes a breach of any of the consumer protection directives specified. Part 8 of the Enterprise Act 2002 implements the Injunctions Directive in the UK. Co-operation arrangements exist to ensure we can tackle scams that cross borders. In Europe member states have just agreed a Regulation (Consumer Protection Co-operation) to ensure that all consumer protection enforcement agencies are working closely together to combat cross border scams, and 30 OECD countries have all signed up to a co-operation agreement to tackle cross border fraud that affects consumers. The International Consumer Protection Enforcement Network (ICPEN) is a network of consumer protection enforcement agencies in over 30 countries that exists to facilitate cross border co-operation on cross border scams and consumer fraud. The Home Office has published, jointly with the Association for Payment Clearing Services (APACS) a leaflet on card safety, which includes a section on using cards safely over the internet. The leaflet has been sent to all police forces in England and Wales, and to Crime and Disorder Reduction Partnerships. It is also available on the Home Office website and the e-tailing mini site, and APACS members (banks) will be sending a version of the leaflet to their cardholders. The Home Office is represented on an industry-led Steering Group, which aims to tackle `Card Not Present' (CNP) fraud (which includes fraud over the internet). We support practical measures being introduced by the industry to increase levels of security for internet transactions. These include Address Verification Services (AVS) and Card Security Code (CSC), along with Mastercard Secure Code and Verified by Visa which require password verification for internet transactions. These initiatives are already making a significant impact on CNP Fraud. The work of the CNP Steering Group has also led to the production of a manual (Spot and Stop Card Fraud Retailer Pack), which aims to educate merchants on the dangers of CNP fraud and the steps which can be taken to prevent it. Government are also involved in the development of Project Endurance, an initiative that will launch an internet security public awareness campaign in spring this year. The project is an alliance of public and private sector, which brings together a number of UK Government Departments and law enforcement organisations with a number of high-profile private sector companies. This campaign is to be targeted at micro businesses and consumers, primarily aimed at helping these users gain confidence in using the internet. We will continue to monitor and review the effectiveness of these many different initiatives.

Secondary information

Type

Written question

Reference

430 c625-7W; 205549;205550;210010

Session

2004-05

Subjects

Consumers Crime prevention Credit cards Fraud Enforcement International cooperation Internet Electronic commerce Protection Security

Link

View this Written question on www.publications.parliament.uk