Britain’s biggest banks have told the prime minister that the government should shoulder the financial burden caused by fraud against companies such as WhatsApp owner MetaPlatform, according to Sky News.
as if Mark Kleinman, city editor @MarkKleinmanSky
Sunday 18 June 2023 01:09, UK
The bosses of Britain’s biggest banks have told Rishi Sunak that the “epidemic” spending by tech companies on internet fraud is undermining international investors’ confidence in the UK economy.
Sky News has received a letter prime minister Signed by the chief executives of nine lenders, including BarclayNat West and National have warned that the UK has become a “hotbed of fraud and fraud”.
They said it was the government. National fraud strategyIt was announced last month that they are not enough to tackle the scale of the problem, which they believe will cost more than £1 billion a year to deal with.
Bank officials told the Prime Minister that £2,300 was stolen from UK consumers every day last year by fraudsters.
He said he plans to take additional steps to “protect our customers” without broad government intervention, including delaying payments, which is a “useful but vague tool that can cause some customers and businesses to stop their legitimate transactions.”
“Online fraud poses a strategic threat to the UK’s prosperity and affects the credibility and trust of the economy and the financial sector,” they said in a letter sent on June 6.
They want tech companies to stop fraud at its source, provide refunds to victims of platform fraud, and provide a public record of tech giants’ failures to prevent fraud.
The banks’ collective intervention meant that big tech companies like Meta Platforms, which owns Facebook, Instagram and WhatsApp, bear much less of the financial burden of the fraud.
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This week, TSB wrote to the New York-listed company asking it to strictly monitor its social media practices.
TSB Chief Executive Robin Bulloch was a signatory to a joint letter to the Prime Minister.
The others were NatWest chief executive Dame Alison Rose; Debbie Crosby, Country CEO; Lloyds Bank Group Head Charlie Nunn; HSBC UK boss Ian Stewart; Matt Hammerstein of Barclays UK; Mike Regnier, CEO of Santander UK; Michael Sorensen of Handelsbanken; and Ann Boden, outgoing CEO of Starling Bank.
It was signed by Bob Wigley and David Postings, chairman and chief executive of UK Finance respectively, the banking lobby group.
In it, Mr Sunack called for further action to combat the “devastating impact fraud is having on people, businesses and the UK economy”.
“Online fraud poses a systemic threat to the UK’s prosperity and affects the credibility and trust of the economy and the financial sector,” he said.
“This should not be seen as just an issue for the UK banking sector.
“It is having a material impact on how attractive the UK financial sector is to inward investors and as we know it is vital to the health of the City of London and the wider UK economy.”
Billions lost to fraud
Bosses highlighted a UK financial report which concluded last year £1.2bn was lost to all forms of fraud, and welcomed the appointment of Conservative MP and former head of the British Bankers Association Anthony Brown.
They told Mr Sunak that most of the scams targeting UK consumers came from “a small number of tech companies, social media companies and telcos”.
“A fraud strategy that does not take action against all the actors involved in the fraud journey and joint responsibility for the damage to consumers will never be effective.
“We are not convinced that voluntary measures in the technology and telecommunications sectors will make the necessary changes to reduce the UK’s attractiveness to fraudsters and prevent harm to customers.”
He pointed out that banks’ efforts to address the problem are being hampered by the Financial Ombudsman Service, which has created a disproportionate burden on their industry.
Bosses said recent discussions with government officials had left them with no confidence in Whitehall’s plan to crack down on fraud.
Mr Sunak called for mandatory voluntary measures aimed at the telecoms and technology sectors, and said consumers should be educated about the security and data risks involved in making payments.
Tech companies also have an obligation to provide more visible warnings to customers, bank officials said.
“An area that we believe needs urgent attention is the prevalence of purchase fraud on meta platforms, which is disproportionately higher than its peers,” he said.
“Tech firms, telcos and social media companies need to do their part to stop scams and make restitution when their platforms are used to scam innocent victims.”
The bank’s chiefs have spent more than £500m over the past three years “building safeguards to help us stop more than £2bn of attempted fraud a year”.
Another request to Mr. Sunak was to name technology companies and regularly publish information on the level of fraud originating from the platform.
“We can all see how these organizations collect user data for ad revenue purposes, and this should provide ways to intervene to protect users from unscrupulous actors,” he said.
Bank officials also urged the government to “be more ambitious than a 10 percent cut.” [in online fraud] It targets more than two million customers per year.
“When there is a collective commitment to the pillar, the strategy is more ambitious and more reliable to reduce fraud by 25%.”