Bank bosses tell Sunak big tech should shoulder costs of ‘pandemic’ scams | business news

The bosses of Britain’s biggest banks have told Rishi Sunak that tech companies must contribute to the costs of an online fraud “pandemic” that is eroding international investor confidence in the UK economy.

Sky News has received a letter to the prime minister signed by the directors of nine lenders, including BarclaysNatWest and Nationwide, in which they warned that the UK has become a “global hotspot for scams and scams”.

You said the government National Fraud StrategyMeasures unveiled last month were not enough to deal with the scale of the crisis, which they say is costing more than £1billion every year to deal with.

Bank bosses told the Prime Minister scammers had been stealing £2,300 from British consumers every day for the past year.

And they said they would consider taking further action “to protect our customers” without broader government intervention, including slowing payments, which they call “a useful but blunt tool that will result in some customers and businesses… stopping their legitimate transactions”.

“Online fraud poses a strategic threat to the UK’s prosperity, affecting credibility and confidence in the economy and financial sector,” the letter, sent on June 6, said.

They want tech companies to be accountable for stopping scams at the source, participate in refunds for victims of scams emanating from their platforms, and create a public registry detailing the extent of tech giants’ failure to prevent it of fraud.

The banks’ collective action underscores the growing frustration that big tech companies like Meta Platforms, which owns Facebook, Instagram and WhatsApp, are bearing so little of the financial burden caused by fraud.

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TSB wrote to the New York-listed company this week, demanding that it monitor its social media activity more closely.

TSB Chief Executive Robin Bulloch was among the signatories of the joint letter to the Prime Minister.

The others were Dame Alison Rose, the CEO of NatWest; Debbie Crosbie, Managing Director of Nationwide; Charlie Nunn, head of Lloyds Bank Group; Ian Stuart, Head of HSBC UK; Barclays UK’s Matt Hammerstein; Mike Regnier, CEO of Santander UK; Mikael Sorensen of Handelsbanken; and Anne Boden, the outgoing CEO of Starling Bank.

It was also signed by Bob Wigley and David Postings, the chairman and chief executive respectively of UK Finance, the banking lobby group.

In it, they urged Mr Sunak to take further steps to combat “the devastating impact of fraud on people, businesses and the UK economy”.

“Online fraud poses a strategic threat to the UK’s prosperity, affecting credibility and confidence in the economy and financial sector,” they said.

“This shouldn’t be seen as just a problem for the UK banking sector.

“It is having a significant impact on how attractive the broader UK financial sector is perceived by foreign investors, which we know is vital to the health of the City of London and the UK economy as a whole.”

Billions lost through fraud

Bosses highlighted a UK financial report concluding that £1.2 billion was lost to fraud of all kinds last year and welcomed the appointment of Anthony Browne, the Conservative MP and former head of the British Bankers’ Association.

They told Mr Sunak that the vast majority of scams targeting UK consumers “emanate from a small number of tech firms, social media firms and telecoms companies”.

“A fraud strategy that fails to hold all actors involved in the fraud journey accountable for action and collective responsibility for the harm done to consumers will never be effective.”

“We are not convinced that voluntary action in the technology and telecoms sectors will bring about the change needed to reduce the UK’s attractiveness to fraudsters and prevent harm to customers.”

They complained that banks’ efforts to address the problem were being hampered by the Financial Ombudsman Service, which they said was putting a disproportionate burden on their industry.

Bosses also said recent talks with government officials had failed to inspire confidence in Whitehall’s plans to crack down on fraud.

They called on Mr Sunak to make voluntary measures mandatory for the telecoms and technology sectors and said they should be forced to educate consumers about the security and data risks involved in making payments.

Tech companies should also be required to warn customers more visibly, bank bosses said.

“One area that we think deserves urgent attention is the prevalence of purchase fraud on META platforms, which is disproportionately higher than its peers,” they said.

“Tech companies, telcos, and social media companies should be responsible for stopping scams at the source and contributing to refunds when their platforms are used to scam innocent victims.”

Bank bosses claimed to have spent more than £500m over the last three years “to build defenses that are helping us stop more than £2bn a year in fraud attempts”.

Her other demands of Mr Sunak included that data should be released regularly to name and shame tech companies on the scale of fraud emanating from their platforms.

“We can all see how these companies collect user data to generate advertising revenue. This in turn must provide ways to intervene to protect users from unscrupulous actors,” they said.

Bank chiefs also urged the government to be “more ambitious than the 10 percent reduction.” [in online fraud] It aims that more than two million customers would still suffer damage every year.

“With a shared commitment across all pillars, the strategy could be even more ambitious and target a more credible 25 percent reduction in fraud.”