Tech companies must pay for a “pandemic” of online fraud that is undermining international investor confidence in the UK economy, the boss of Britain’s largest bank has told Rishi Sunak.
Sky News has received a letter to Prime Minister Signed by the CEOs of nine banks, including barclays bankNatWest and Nationwide, in which they warned that the UK had become a “global hotspot for fraud and scams”.
they say the government National Fraud Strategyannounced last month, is not enough to tackle the scale of the crisis, which they believe will cost more than £1bn a year.
UK consumers lost £2,300 a day to scammers last year, bank chiefs have told the prime minister.
They said they would consider further action to “protect our customers” without wider government intervention, including slowing down payments, which they described as “a useful but blunt tool that means some Customers and businesses will find their legitimate transactions hindered.”
“Online fraud poses a strategic threat to the UK’s prosperity and affects the credibility and confidence of the economic and financial sectors,” they said in a letter sent on June 6.
They want tech companies to take charge of stopping scams at source, offer refunds to victims of scams originating from their platforms, and have a public registry that shows the scale of the tech giants’ failure to prevent scams.
The banks’ collective intervention underscores growing frustration that big tech companies such as Meta Platforms, owner of Facebook, Instagram and WhatsApp, bear little of the financial burden of fraud.
read more:
UK universities and tech companies get £4.3m in funding
London mayor’s fund faces £3m loss
This week, the TSB wrote to the New York-listed company asking for stronger oversight of its social media business.
Robin Bulloch, chief executive of TSB, was one of the signatories to the letter to the prime minister.
The others are Dame Alison Rose, chief executive of NatWest; Debbie Crosbie, chief executive of Nationwide; Charlie Nunn, chief executive of Lloyds Banking Group; Ian Stuart, boss of HSBC’s UK arm; Matt Hammerstein of Barclays UK; Mike Regnier, CEO of Santander UK; Mikael Sorensen of Handelsbanken; and Anne Boden, outgoing CEO of Starling Bank.
It was also signed by the chairman and chief executive of banking lobby group UK Finance, Bob Wigley and David Postings.
In it, they urged Mr Sunak to take further steps to combat “the devastating impact fraud has on individuals, businesses and the UK economy”.
“Online fraud poses a strategic threat to the UK’s prosperity and affects the credibility and confidence of the economy and the financial sector,” they said.
“This should not be seen as a problem for the UK banking sector only.
“It has significant implications for the attractiveness of inward investors to the wider UK financial sector, which, as we know it, is critical to the health of the City of London and the wider UK economy.”
Billions of dollars lost to fraud
The chief executives highlighted a UK financial report that concluded £1.2bn was lost to various frauds last year and welcomed the appointment of Conservative MP and former BBA chairman Anthony Browne .
They told Mr Sunak that the vast majority of scams targeting UK consumers “emanated from a handful of technology companies, social media companies and telcos”.
“A fraud strategy will never be effective if it fails to enforce action by all players involved in the fraudulent process and collective responsibility for the harm done to consumers.
“We do not believe that voluntary measures targeting the technology and telecoms sectors will bring about the changes needed to make the UK less attractive to fraudsters and prevent harm to customers.”
They complain that banks’ efforts to tackle the problem have been undermined by the financial ombudsman service, which they say puts a disproportionate burden on their industry.
Bosses also said recent conversations with government officials had not given them confidence in Whitehall’s plans to crack down on fraud.
They called on Mr Sunak to enforce voluntary measures targeting the telecoms and tech industries, saying they should be forced to educate consumers about the security and data risks of payments.
UK consumers lost £2,300 a day to scammers last year, bank chiefs tell PM
Tech companies are also obliged to provide more visible warnings to customers, bank bosses say.
“One area that we believe needs urgent attention is the prevalence of purchase fraud on the META platform, which is far higher than on similar platforms,” they said.
“Tech companies, telcos and social media companies should take responsibility to stop scams at source and provide refunds when their platforms are used to defraud innocent victims.”
Bank chiefs claim to have spent more than £500m in the past three years “to build defenses that help us stop more than £2bn of fraud attempts each year”.
Among other demands they made of 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 provide ways to intervene to protect users from wrongdoers,” they said.
The bank chief also called on the government to be “more ambitious than a 10% cut” [in online fraud] It’s still aiming for more than 2 million customers to be harmed every year.
“With collective commitment across the pillars, the strategy could be even more ambitious, targeting a 25 per cent reduction in fraud.”