Response to interpellation 2022/23:170 on fraud

Statsrådet Niklas Wykman (M)

Mr. Speaker! Nadja Awad has asked me if I and the government intend to take any measures, partly regarding banks that do not want to compensate their affected customers, and partly regarding stopping fraud via social manipulation.

Fraud is a major and growing societal problem that needs to be prevented and deterred. As society has become increasingly digitized, it has in many ways become easier and smoother to make payments and conduct banking matters. At the same time, this has also facilitated the activities of fraudsters. According to the Swedish Police Authority, fraud against private individuals, not infrequently elderly people, is an important and growing source of funding for criminal networks. The total crime profits resulting from fraud amounted to just over 3 billion kronor in 2021, according to the authority's calculations.

Even though there is a large number of types of fraud, the vast majority of these presuppose that criminals misuse products and services provided by banks. Banks therefore have a very strong role in countering fraud in the payments market.

The Swedish Police Authority, Nordea, SEB, Handelsbanken, Swedbank and the Swedish Bankers' Association have entered into an agreement on cooperation to prevent, deter and hinder fraud. By identifying success factors in crime fighting and vulnerabilities in the financial system, the intention is, among other things, to counter criminals laundering profits from fraud into other crimes. With reference to the large amount of fraud, the Swedish Police Authority has also pointed out the need for preventive measures from the banks' side and that it is not reasonable to believe that the problem can be solved through efforts only from the law enforcement authorities.

Provisions on banks' obligations to prevent and manage fraud in the payments market are contained in the Payment Services Act, which implements the EU's Second Payment Services Directive. It is the Swedish Financial Supervisory Authority (Finansinspektionen) that exercises supervision over that banks comply with the provisions.

Firstly, requirements are set for strong customer authentication. This means that secure identification methods shall be used when a consumer makes an electronic payment, logs into their payment account online, or performs any remote action that may involve a risk of fraud. Two examples of identification methods that meet the requirement are bankdosa or bank-id, i.e., the identification methods provided by the banks. The requirement for strong customer authentication has reduced the number of card and credit frauds. In the bill Strong customer authentication for invoice payments online of 27 October 2022, the government therefore proposed that it should be clarified that the requirement applies when invoice payments constitute a payment service. The Riksdag adopted the bill on 7 December 2022, and it entered into force on 1 January 2023.

Secondly, requirements are set that a bank must have a system with appropriate measures and control mechanisms to manage operational risks and security risks associated with the payment services it provides. Since criminals find new ways to commit crimes, it is inherent in the nature of the matter that the counteraction of fraud needs to be developed continuously. One example that has reduced fraud is mobile BankID with QR codes. I assume that the banks will also in the future develop the security surrounding their identification methods to counter fraud.

Thirdly, consumers as a rule have the right to have their account restored in cases of fraud. Certain exceptions are made to the general rule. If a fraud has been committed because the consumer has been grossly negligent, he or she is responsible for the amount, however, at most 12,000 kronor. If the consumer has acted in a particularly reprehensible manner, he or she is however responsible for the entire amount. The question of the demarcation between gross negligence and particularly reprehensible conduct has been subject to review by the Supreme Court and the National Board for Consumer Disputes. As a government minister, I cannot comment on how the law should be applied in individual cases.

Combating crime is a priority area for the government. The area is also one of the cooperation projects that the governing parties have with the Sweden Democrats to solve Sweden's most important social problems. The basis for the cooperation is the Tidö Agreement. A number of measures within the area have been taken, and more are underway.

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Nadja Awad (V)

Mr. Speaker! Thank you, Minister, for the answer! It feels very good that the Minister says that fraud is a major and growing societal problem that needs to be prevented and stopped. Almost every day we see on the news that people are being subjected to fraud. It concerns, as the Minister mentions, bank customers who have been affected by ruthless frauds in recent years, which have resulted in their bank accounts being emptied. Most often, the individual account holder has had to bear the entire loss themselves, which can amount to a lifetime's savings. We in the Vänsterpartiet take this very seriously.

Therefore, I want to clarify that according to the Swedish National Council for Crime Prevention, Brå, around 195,500 fraud crimes were reported during 2022, which is at the same level as the previous year. However, the number had increased by 33 percent from a ten-year perspective.

We know that frauds through social manipulation have increased. This means that people are manipulated into performing various actions, most often because the fraudster wants to get access to money. This is one of the most common crimes in Sweden, which continues to increase. As the minister also says, this is very much linked to the fact that society has become increasingly digitized. It has made it easier and smoother to make payments and bank transactions, but the downside is that it has simultaneously facilitated the activities of fraudsters.

I want to specifically emphasize that the elderly are a particularly vulnerable group, Mr. Speaker. The Internet Foundation's study *Svenskarna och internet 2022* shows that every 25th person, i.e., 4 percent, of those born in the 1920s and 1930s have had unauthorized persons ask them for codes from their bank token. In total, six out of ten internet users have been subjected to attempted fraud online during the previous year.

The reason I say this, Mr. Speaker, is that no matter how you turn it, it is about banks offering products and services but not having a sufficiently strong security system to make these frauds impossible. Obviously, it is about very skilled fraudsters, and there must be a sense of reasonableness in how prepared, skeptical, and informed ordinary people need to be.

I raise that responsibility here. The banks need to take it. It is already a very tough time economically for incredibly many consumers, and we cannot let fraud be an additional factor that hits people's wallets hard.

It is obviously good, as the Minister says, that the Police Authority and major banks have entered into an agreement on cooperation to prevent, deter, and hinder fraud, and that requirements are also being placed on, for example, the banks' security systems. However, I wonder if the Minister considers that the requirements placed on the banks' security systems are sufficient given the constant development of digitalization and that fraudsters have become more sophisticated in their activities. There is, for example, a need for measures regarding the design of customer authentication. There are people who have been defrauded due to insufficient limitations regarding the Swish application.

What does the Minister consider: Should further requirements be placed on the banks' security systems?

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Statsrådet Niklas Wykman (M)

Mr. Speaker! Thank you, Nadja Awad, for the questions on a very important and current topic! One of the things that upsets people the most is when this type of crime hits people who have worked and struggled their whole lives and want a secure old age and want to be able to buy a Christmas present for their grandchildren, add a golden touch to their lives, or just try to get through the very tough time that is marked by high prices and inflation. It is a despicable form of crime where not only their finances but their entire security is taken away from them.

It is about criminals seeking out people via telephone or even coming to the homes of people who are in a vulnerable situation and then exploiting the vulnerability to steal their money. Those who do this to elderly people do not just steal their savings, but they take away their security in the later part of life. Perhaps it was both a security for oneself, because one wanted to do things in the autumn of life, and a gift that one wanted to be able to leave behind for loved ones - all of this is one robbed of through despicable, gross, and organized crime. These are horrific acts against individuals that take so much away from them - much more than just the money, it should be said.

I am pleased that the Left Party, through Nadja Awad, is also engaging in this issue. I welcome the Left Party's engagement in all efforts and measures against organized crime as well in the future. It is important to understand that this is not just about criminals who aim to steal money from elderly people or people with low technical knowledge, but many times it is criminals who are part of criminal structures or networks that have the business idea of committing crimes in different ways. This is one of the ways they commit crimes.

I agree with Nadja Awad that we constantly need to raise the requirements we set for banks and other actors in the financial system so that we can be resilient and robust. It does not only concern fraud, it should be said, but also resilience in IT systems in general. Fraud is one part, but we also see how the systems are exploited in many other ways by actors who wish the Swedish state and the Swedish people ill. Here it is important that we gradually tighten the requirements on the actors that exist.

Then one also needs to announce that there are some trade-offs to be made in this. The more security one builds in, the more complications one builds in for the consumers who want to use the services. There, it is important that the trade-off is made in a good way, obviously.

There are also risks with simply saying that banks should always compensate everyone. It can lead to a situation where individuals do not take the responsibility that one must always take for one's account, one's codes, and so on. We cannot have a society where one does not have a personal responsibility. That is obvious. Another and perhaps even more serious aspect and consideration is that if banks are always and unconditionally to compensate everyone, there is a risk that criminal networks rig systems to exploit this. It could be that all parties in the fraud are aware of what is happening and plunder other people's accounts. Ultimately, it is ordinary people with jobs or pensions who have their bank accounts, and we cannot have an arrangement where it is possible to rig systems where people plunder each other and everyone is in on it to then let other customers in the bank compensate for this. So we cannot have that either.

Basically, there are a number of difficult trade-offs that need to be made. But we really must smoke out these criminal elements from the financial system and create security, not least for our seniors.

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Nadja Awad (V)

Mr. Speaker! It feels promising to hear about the Minister's and the Government's important work and understanding of the issues that exist regarding preventing, hindering, and complicating fraud.

But what the Minister was touching upon is also the question of what responsibility the banks should take when the frauds have already occurred. As previously mentioned, it is about vulnerable and affected people who deserve justice. Many are elderly and many are disabled. But it is also about customers' trust in the banks. Again: There is a limit to how prepared, skeptical, and informed ordinary people are expected to be, because the fraudsters in question are very skilled.

In June 2022, a ruling from the Supreme Court arrived which signified a partial new practice in comparison to previous ones. The court clarified that more is required than the National Board for Consumer Disputes' current practice for an account holder to be considered to have acted particularly reprehensibly, so that the bank's liability thereby ceases and the individual themselves must bear the entire loss.

Even the National Board for Consumer Disputes has changed its mind and recommends that banks compensate fraud victims. After the judgment, the Consumer Ombudsman Cecilia Tisell also came out and demanded that all banks follow the Supreme Court's decision and compensate victims of fraud. This was supposed to mean that the banks would overturn previous decisions which have resulted in customers being left without compensation. But unfortunately, this has not been the case. Not all banks have taken their responsibility to review old fraud cases where customers were denied compensation.

I and Vänsterpartiet want to hear that the minister and the government take this irresponsibility seriously. But instead, the minister says in the interpellation response that he as a minister cannot comment on how the law shall be applied in individual cases and that it will be difficult trade-offs when one is to put pressure on the banks to take responsibility and compensate their customers now that the Supreme Court, the National Advertising Review Board, and the Consumer Ombudsman have taken the bank customers' side.

I also want to say that this is a structural problem. During the second half of 2022, 1,190 banking cases were reported to the National Board for Consumer Disputes, which can be compared to 531 cases during the first half. The sharp increase is linked to the HD judgment that came this summer.

The customers have the Supreme Court's judgment behind them, as do the Consumer Ombudsman and the National Advertising Review Board. They demand that the banks take greater responsibility for compensating the customers.

I do not ask the Minister to go into individual cases but to speak about this as the responsible minister. Can the Minister and the Government understand how the banks are failing their defrauded customers, and what measures does the Minister and the Government intend to take to secure the situation for ordinary consumers and ordinary people during these difficult times?

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Statsrådet Niklas Wykman (M)

Mr. Speaker! Nadja Awad has just accounted for the measures that the rule of law in Sweden has already taken. In my response, I accounted for the measures and the work that is ongoing in the area. I believe it is important that one lets the rule of law be a rule of law - a government minister or a member of Parliament should not step in and point at an individual actor and tell exactly how it should act. For this, we have the rule of law, our courts and authorities.

It becomes a bit paradoxical when Nadja Awad explains exactly how the apparatus works – namely through court decisions, agency decisions, and recommendations – and yet says that a politician should step in and point with the whole hand. I do not want the Left Party social model, but I want the liberal democracy and the rule of law as we have it in Sweden. I do not want to replace it with the type of direct directives that are requested via this interpellation. Through our rule of law and our agencies, we shall continue to work to keep people safe.

There is much to be done here in Sweden. We have seen how organized crime has taken root in our society and created problems and insecurity and sometimes pure hell on earth for people. This must, of course, be uprooted. It is about countering these frauds with laws and regulations, mandates for our authorities and, of course, requirements for the banks to have adequate and good IT systems.

But it is also about emphasizing personal responsibility, something that Nadja Awad does not really seem to want to be held accountable for. We can never reach a point where we say that now society or the state shall take all the responsibility and ensure that everything works. We must continue to talk to grandmother, grandfather, mom, dad, and everyone in society about the need to be vigilant and cautious and never give out codes. One should get in touch with one's relatives, and one should contact the police.

This can never be fixed with just one party taking responsibility. The gross, organized crime and fraud must be countered through knowledge and by the entire society and all its citizens also participating and engaging.

It is important to acknowledge that in difficult issues, there are almost always difficult trade-offs. If you build a system that is very robust, it becomes very difficult to use. We want a society where one can Swish and easily pay and make transfers. It should not be required to be a civil engineer with IT competence in order to be able to log in to one's internet bank or anything else, Madam Speaker. We want a society where such things are simple, but at the same time, we do not want it to be able to be exploited by criminals to commit, for example, fraud, money laundering, or anything else.

Politics must take a unified grip on the development. It is crystal clear that the government, together with the Tidö Agreement entered into with the Sverigedemokraterna, is focusing all attention on taking hard action against the criminals and the criminal gangs. Part of this is, of course, to work against the frauds that occur primarily against the elderly in our society. Others are also affected, but most often it is the elderly who are hit hardest by this.

Here, it is obviously important with knowledge-raising measures, but an open question also concerns those who commit these crimes. There must be a price for committing these crimes, and it is many times here that I feel the Vänsterpartiet wavers. There shall be sentence reductions, there shall be low sentences, there are harsh words against the police and many things that fundamentally make it easier to commit crimes. Can Nadja Awad also see that there is another side to this?

We stand one hundred percent behind those who are affected by fraud. We stand one hundred percent for better, clearer and more transparent work against crime in the whole of society. Does Nadja Awad stand behind the police?

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Nadja Awad (V)

Madam Speaker! I am proud that the Left Party stands behind ordinary people in many different ways, the elderly and the disabled, those who are already marginalized in our society.

We in Vänsterpartiet view very seriously that the banks are dodging a judgment from the Supreme Court and what the authority Allmänna reklamationsnämnden and the state Consumer Ombudsman refer to when it concerns the banks. The government can actually put pressure on the big banks that have refused to take the responsibility that ordinary people have had to take. But now it is clearly being said that the banks do not need to take it.

Once again, I hear the Minister and the Government say that they do not want to take this responsibility. No one is asking them to intervene in individual cases, but this is about a structural problem. I am not saying that we should step in and meddle in Åsa Ikekhuas's situation, she who was defrauded of 25,000 kronor when someone pretended to be her son, or Joakim Norén who lost nearly 280,000 kronor.

What is wanted instead is a solution that can be applied to the banks' security systems. We agree many times on the measures that are required to prevent fraud over the internet and telephone. When the misfortune has occurred, the banks shall take their responsibility, and there shall be a political incentive from the government and ministers to stand behind ordinary people and demand this responsibility. If, via the government's directives, there is a coordinated operation from the Police Authority together with the banks in order to prevent, preclude, and hinder the frauds, it is actually not impossible to have the same dialogue about compensation when the misfortune and the frauds have already occurred.

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Statsrådet Niklas Wykman (M)

Madam Speaker! I and the government have as a priority to address the insecurity that has taken root in Swedish society. It is outrageous and appalling when criminal gangs and groups target our elderly and vulnerable people in society and take their safety and money from them. Many experience it even worse when people push their way into their homes and take the last bit of safety from them. They believed they could trust society, the police, or the bank, but instead, they feel alone and helpless in this.

This must, of course, be combated with force. It shall be combated with legislation, with police, with supervision of our banks, with better IT systems, with technical development, and with the full force of society.

However, it should not be combated in the way that Nadja Awad suggests in the discussion here, namely by having politics overrule, interfere with, or review the rule of law. It is through the rule of law, not by setting it aside, that we are to address crime. It should not happen by abolishing the principle of authorities and police working with their tools and courts that judge. We shall not remove that principle in order to instead step in and have a political decision-making regarding exactly what should happen in the different situations.

However, I could wish for more trust, resources, and also support for this from the Left Party's side, for example for the police's work. We now have many proposals to tackle organized crime in society. It concerns proposals and steps regarding new confidentiality rules, harsher penalties, and improved measures to tackle different types of crime. There are also discussions about preventive coercive measures.

I could wish, Madam Speaker, that the Left Party also stands behind this. This is not an isolated phenomenon but part of the organized crime that is eroding the entire society. We shall win back everyone's safety, not least that of the elderly.

The interpellations debate was hereby concluded.

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