Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

We will be supporting the Bill. Once again, we find ourselves in a position where we are transposing a very long overdue EU directive. The purpose of the Bill is to transpose outstanding elements of Directive 2014/62/EU on the protection of the euro and other currencies against counterfeiting by criminal law. The directive calls on member states to introduce criminal offences and sanctions relating to counterfeiting of the euro and other currencies. It introduces common measures in respect of that. The directive also addresses territorial jurisdiction and requires special investigation measures. Has there been a regulatory impact assessment on what additional resources must be provided to ensure that this can be properly applied? The importance of protecting against counterfeiting lies in the need to ensure confidence and trust in the authenticity of the currency.

The deadline for transposing the directive was 23 May 2016. Ireland is the only member state that is yet to transpose the directive. As I stated last week, we often hear from the Government that we are good Europeans. However, in this particular context we have a mindset that is quite poor at transposing EU directives. Very often it happens when we are threatened with a fine or other sanction. We must change that mindset. We debated the Criminal Justice (Theft and Fraud Offences) (Amendment) Bill last week. That was due in July 2019. This country and Romania were threatened with fines. The deadline for the mutual recognition of custodial sentences Council framework decision of 27 November 2008 was 2011. The deadline for the control of the acquisition and possession of weapons directive was 2019. We can all give such examples, but we must change our behaviour in this regard. Very often the legislation is technical and it is difficult to figure out why we are repeatedly late.

We support the introduction of the Bill, but there may well be issues on which we will table amendments. The ECB reported that the amount of counterfeit notes taken from circulation in 2020 was at all-time low. A total of 460,000 euro banknotes were withdrawn from circulation last year in comparison with 559,000 in 2019.

In 2016, the year in which this directive should have been transposed, 684,000 counterfeit notes were found and removed from circulation. Approximately two-thirds of those withdrawn in 2020 were €20 and €50 banknotes. The ECB stated that these notes were all low quality reproductions, poor imitations of the real thing, and were easy to detect even by turning them over and examining them. Shopkeepers pay particular attention to that when alerted.

There was a significant drop in the number of counterfeits in the latter half of last year. That is probably an indication of the effect of the pandemic on the amount of cash in circulation. This trend is likely to continue because once people make a change, they tend not to go back. All methods of spending experienced a sharp decline in the early part of the first lockdown. The decline in ATM withdrawals was greater than the decline in card spending. While the number of ATM withdrawals has decreased, the average amount withdrawn is higher than historical averages. This shows a trend towards cashless transactions, with people reducing the number of times they use an ATM. Successive lockdowns have pushed consumers on to online platforms, while the raising of ceilings for contactless payments and the increased number of businesses accepting cash has encouraged card use. This trend has been replicated across Europe, with France set to shut down more than a third of its cash-handling centres by the end of 2022. As the Covid pandemic accelerates, the decline in the use of notes and coins is accelerating.

As our spending habits have changed considerably over the years, so too has the type of fraud we face. Previous speakers have described that well. While counterfeit notes and coins were the primary problem in the past, online and credit card fraud are now the main concern. In 2019, criminals made more than €22 million through more than 250,000 fraudulent credit and debit card transactions in Ireland. We saw one such high profile case being prosecuted successfully in the courts recently.

The Banking Payments Federation of Ireland, BPFI, noted that losses due to credit card fraud were down by 49% compared with 2016, with the decrease in fraud being even more marked when compared with the 28% increase in credit and debit card usage in the same year-long period. More than 90% of card fraud took place online rather than in-store. The decline in card fraud could be attributed to a combination of better detection and fraud monitoring systems put in place by banks as well as consumers becoming more aware of the risks of fraud and the ways they can protect themselves. The decline is promising but more effort is always required to drive these figures lower, especially with the increase in online shopping under Covid-19 restrictions.

Younger people in particular are at increased risk of fraud due to online shopping behaviour. Research carried out by the BPFI found that 39% stated they sometimes or always click on links in social media and advertisements rather than visiting the relevant sites independently. The number jumped to 59% among those aged between 18 and 24 years. Some 35% stated they rarely or never check the security of a website that they are shopping with. Women are much more likely than men to click on links in social media advertisements and less likely to check for the padlock symbol. Men are much more likely to send their card details by email, use public WiFi when making payments and purchase from unfamiliar sites. That indicates that there has to be a targeted approach in messaging. Particular groups are more trusting and there has to be significant effort to try to reduce that.

Public information is as good a vehicle as some other systems that have been put in place. We need to ensure that we are keeping up with developments in fraud and that the protections we have in place for consumers are sufficient. The fight against fraud is a matter of constant evolution and investment. Whenever new technological developments are put in place to protect against fraud, it is a countdown until fraudsters will find a way to work around those new systems.

We must be more timely in implementing protections against fraud and staying ahead. Looking at historical cases of counterfeiting and how it has changed, one might laugh at some of the things that happened in the 19th century. Coins were a focus of counterfeiting. Two articles indicate this. In Dublin, detectives stated that they found prisoners in the act of making coins, consisting of penny pieces made of "spurious bronze". They were base coins. The article refers to a number of moulds. The coins were seized and there was a court case as a consequence. Another article refers to poor quality florins, a two shilling coin. There are about five of those in a euro. Detectives were sent out to investigate this. There have always been people who will try this and money has always been a target of fraud. It is a question of staying ahead and there has been an acceleration with online services, where there will be significant exposure to fraud. We have to do better in making sure that we transpose these directives in a more timely way. We worry about our reputation but we do not do it any good by being laggards.

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