Britain’s biggest banks have told the Prime Minister that the government must make companies like Meta Platforms, the owner of WhatsApp, shoulder some of the financial burden caused by the scam, Sky News reports.
Via Mark Kleinman, City Editor @MarkKleinmanSky
Sunday, June 18, 2023 01:09, UK
Bosses of Britain’s biggest banks have told Rishi Sunak that tech companies must contribute to the cost of a “pandemic” of online fraud that is eroding international investors’ confidence in UK economy.
Sky News has received a letter for Prime minister signed by the executives of nine lenders, including BarclaysNatWest and Nationwide, in which they warn that the UK has become a “global hotspot for fraud and scams”.
They say that the government National fraud strategyannounced last month, is not able to tackle the scale of the crisis, which it believes will cost more than £1 billion a year to resolve.
Bankers told the Prime Minister that £2,300 was stolen from UK consumers every day last year by scammers.
And it said it would consider taking more action “to protect our customers” without broader government intervention, including slowing payments, which they describe. described as “a useful tool but blunt means that some customers and businesses will see their legitimate transactions put on hold”.
“Online fraud poses a strategic threat to the well-being of the UK and affects the reputation and confidence in the economy and financial sector,” they wrote. 6/6.
They want tech companies to take responsibility for stopping scams at the source, contribute to refunding victims of scams that originate from their platforms, and public registrations that show the extent of failure. of tech giants in preventing scams.
The banks’ collective intervention underscores growing frustration at the fact that big tech companies like Meta Platforms, owner of Facebook, Instagram and WhatsApp, are bearing so little of the financial burden due to caused fraud.
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This week, TSB wrote to the New York-listed company asking it to exert stricter control over its social media activities.
TSB CEO, Robin Bulloch, was among the signatories of the joint letter to the Prime Minister.
The others are Dame Alison Rose, CEO of NatWest; Debbie Crosbie, National Managing Director; Lloyds Banking Group Director Charlie Nunn; Ian Stuart, boss of HSBC UK; Matt Hammerstein of Barclays UK; Mike Regnier, CEO of Santander UK; Handelsbanken’s Mikael Sorensen; and Anne Boden, outgoing CEO of Starling Bank.
It was also signed by Bob Wigley and David Postings, respectively the chairman and chief executive officer of UK Finance, the banking lobbying group.
In it, they called on Mr Sunak to take further steps to combat the “impact that fraud is having on UK people, businesses and the economy”.
“Online fraud poses a strategic threat to UK prosperity and affects the reputation and confidence in the economy and financial sector,” they said.
“This should not be seen as a problem for the UK banking sector.
“It is having a significant impact on how attractive the UK’s broader financial sector is to inward investors, which, as we know, is crucial to the health of the UK. City of London and the wider UK economy.”
Losing billions of money due to fraud
The leaders highlighted a UK Finance report that concluded £1.2 billion was lost to fraud of all kinds last year and welcomed the appointment of Anthony Browne, Conservative MP and Former director of the British Bankers Association.
They told Mr Sunak that the vast majority of scams targeting UK consumers “originated from a small number of tech companies, social media companies and telcos”.
“A fraud strategy that does not impose action on all actors involved in the fraud journey, and is collectively responsible for harm caused to consumers, will never work.
“We do not believe that the voluntary measures introduced to the tech and telecom sectors will bring about the change needed to reduce the UK’s attractiveness to fraudsters and prevent harm. for customers.”
They complain that the banks’ efforts to tackle the problem have been undermined by the Financial Ombudsman Service, which they say places a disproportionate burden on their industry.
Bosses also said recent conversations with government officials did not build confidence in Whitehall’s plan to crack down on fraud.
They called on Mr. Sunak to take mandatory voluntary measures for the telecoms and technology sectors, and said they should be forced to educate consumers about data and security risks when making payments. .
Tech companies also have an obligation to provide clearer warnings to customers, bankers said.
“One area that we believe urgently needs focus is the proliferation of purchase scams on META platforms, which are unusually high compared to peer-to-peer platforms,” they said. “.
“Tech companies, telecom companies and social media companies are responsible for stopping scams at the source and contributing to refunds when their platforms are used to defraud victims. innocent.”
Bankers claim to have spent more than £500 million over the past three years “building defenses that help us prevent more than £2 billion a year in fraud attempts”.
Among their other demands to Mr. Sunak was that data should be released regularly to name and shame tech companies about the extent of fraud emanating from their platforms.
“We can all see how these companies collect user data for advertising revenue purposes: this in turn must come up with interventions to protect users from attackers,” they said. unethical”.
Bankers also called on the government to be “more ambitious than a 10% cut [in online fraud] it is targeting will still leave more than two million customers compromised each year.
“With a collective commitment across the pillars, the Strategy can be even more ambitious and aim to more reliably reduce fraud by 25%.”