Consumers at risk of being scammedThe consumer protection system isn't doing enough
09 November 2011
Advances in technology are leaving consumers at risk of scams, according to a new report by MPs.
The Commons Public Accounts Committee has found that the mechanisms for consumer protection aren't always standing up to the challenges presented by online technology. It also revealed that fraudsters are taking advantage of the fragmented nature of the current system.
Gaps in the safety net of consumer protection
Both central government and local authorities are responsible for consumer law enforcement, and scammers have been found to be setting up in areas where local authorities are spending less on this sort of consumer protection.
As major scams can now be conducted completely online, these fraudsters can then target consumers all over the country, not just in their local area.
Technology is helping local scams to go national
The report explains: '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.'
Concerns about cutbacks
The report states that consumers are losing some £6.6 billion every year to bank and card fraudsters and other rogue traders.
The government plans to get rid of the Consumer Focus watchdog and scale back the work of the Office of Fair Trading. These proposals - announced earlier this year - have prompted concerns that the consumer protection system will come under even greater pressure.
Which? investigates online security
In September, we investigated how the UK's major current account providers fared in terms of online security. We highlighted some of the ways criminal gangs are trying to outwit the banks. And we found that there were big variations in the level of security offered.
Nationwide was found to have the best website on test, with good login security and logout performance.
In contrast, Norwich & Peterborough Building Society had the weakest security. For example, it's one of the account providers that asks for the different parts of the PIN and password when a login error is made. This exposes it to fraud by keylogger - a device or programme that monitors and logs each keystroke a user types.