A group of the UK’s largest banks have told Prime Minister Rishi Sunak that big tech firms should help contribute to the reimbursement of fraud victims.
According to Sky News, the banks said the rising tide of fraud in the UK is having a “material impact on how attractive the wider UK financial sector is perceived by inward investors, which as we know, is critical for the health of the City of London and wider UK economy.”
“Online fraud poses a strategic threat to the prosperity of the UK and impacts the credibility of, and confidence in, the economy and financial sector,” the letter continued.
Figures from UK Finance show that £1.2bn was lost to fraudsters last year, making the UK the “fraud capital of the world”.
A range of proposals have been put forward to clamp down on the problem. The government launched its National Fraud Strategy earlier this year, which included a unit of new specialised investigators.
Under incoming rules from the Payment System Regulator meanwhile, banks will be mandated to reimburse victims of fraud within five days.
However, plans to make big tech firms reimburse victims were watered down in the government’s fraud strategy to the dismay of the financial sector.
The letter – signed by the big four banks, Nationwide, Santander, TSB, Starling and Handelsbanken – argued that the responsibility to tackle fraud went beyond the banks involved.
“A fraud strategy that fails to mandate action on all actors involved in the fraud journey and collective responsibility for the harm done to consumers, will never be effective,” the letter said.
“This should not be seen just as an issue for the UK’s banking sector.”
The banks claimed to have spent more than £500m in the last three years in attempts to build their defences against innovative fraud techniques.
Banks have increasingly singled out Meta as the source of most fraudulent content. Last week TSB wrote directly to the American tech giant calling for “urgent” intervention to tackle the problem.
According to current industry projects, consumers could lose up to £250m from Meta platforms in 2023 without action from the tech giant.
A Meta spokesperson said: “We don’t want anyone to fall victim to these criminals which is why our platforms already have systems to block scams, financial services advertisers now have to be FCA authorised to target UK users, and we run consumer awareness campaigns on how to spot fraudulent behaviour.”