Michael McGrath (Cork South Central, Fianna Fail)
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Investment fraud is where criminals pose as investment managers to deceive someone into investing money in schemes and projects that do not exist. This type of fraud usually involves a level of social engineering, where victims are manipulated into making real-time payments to fraudsters, and in some cases can be carried out through authorised push payments. These type of frauds are called cyber-enabled frauds.

As the Deputy will be aware, by law the investigation of this type of crime is an operational matter for An Garda Síochána. As Minister for Finance, I have no role in these matters. However, I can assure the Deputy that work is being carried out on this issue.

Following on from the review of the second Payment Services Directive (PSD2), on June 28 the European Commission published a proposal for an updated Payment Services Directive (PSD3), accompanied by a proposal for a Payment Services Regulation. These proposals contain anti-fraud measures regarding both fraud prevention and redress including:

An extension of IBAN/name matching verification services to all credit transfers. These have been proposed by the Commission for instant payments in Euro;

A legal basis for Payment Service Providers (PSPs) to share fraud-related information between themselves in full respect of GDPR via dedicated IT platforms;

The strengthening of transaction monitoring;

An obligation by PSPs to carry out education actions to increase awareness of payments fraud among their customers and staff; and an extension of refund rights of consumers in certain situations.

The Department of Finance is also currently engaged in the action of a number of recommendations arising out of the retail banking review, including engaging with the financial literacy stream of the Adult Literacy for Life Strategy so that Ireland is compliant with the OECD High Level Principles on Financial Consumer Protection and the Recommendation on financial literacy.

The Retail Banking Review contained a recommendation for the Department to lead on the development of a National Payments Strategy (NPS) in 2024, developing a new strategy that will take account of the changing landscape and determine how best to adapt to it. The NPS will also take account of the EU legislative landscape, particularly the proposals on instant payments and payment services.

A key element of the work will be to examine and analyse the critical issue of payment fraud. While much of this is governed by EU legislation, it is important that the NPS examines and analyses payment fraud to see if it can identify further measures that could be taken to address fraud at a domestic level.

A large proportion of payment fraud is facilitated through false communications and the Commission for Communications Regulation, a body under the aegis of the Department of Environment, Climate and Communications, is actively working with the telecoms industry through the Nuisance Communications Industry Taskforce (NCIT). ComReg published Consultation 23/521 in June 2023 setting out proposals for combatting scam calls and texts and in addition, the NCIT have published a number of information documents to help businesses combat scam communications, these are available on their website. An obligation for electronic communications services providers to cooperate with PSPs is also proposed in the PSR, with a view to preventing fraud.

I am informed by the Central Bank of Ireland that a dedicated unit has been established, the Unauthorised Providers Unit (‘UPU’), which investigates alleged instances of unauthorised activity carried out by individuals or entities that are not authorised or regulated by the Central Bank.

All instances of alleged unauthorised activity are investigated by the Central Bank and all statutory reporting obligations are complied with over the course of the investigations. The UPU liaises closely with An Garda Síochána, in respect of unauthorised activity to effectively address these wrongdoings through crime prevention and consumer protection initiatives. The Central Bank also recently launched a campaign to help consumers avoid scam operations, including a combination of a digital campaign, a regional radio ad campaign and targeted media interventions.

Finally, consumers are advised to seek professional advice when investing, whether in cryptocurrency or any kind of investment product, and to check the Central Bank website and ensure the company is regulated. An Garda Síochána is advising the public to pay particular close attention when considering any potential investments.