British banks want govt to make big tech share cost of fraud pandemic

Say it is undermining investors' confidence

LONDON (Web Desk) – In a bid to protect their customers, the top British banks have asked the government that big tech companies should contribute to the cost of financial burden as they deal with scams and fraud cases that involve the use of these platforms, media reports suggest.

In a letter to Prime Minister Rishi Sunak, the bosses of these banks – including Barclays, NatWest and Nationwide – described it as an online fraud pandemic, saying the cost to deal with the crisis was over £1 billion a year.

Noting it was undermining international investors’ confidence in the UK economy, they warned that the UK had become a global hotspot for fraud and scams.

The National Fraud Strategy was inadequate to tackle the crisis, they said, adding that they would consider taking further action to protect customers.

"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," they said in the letter, sent on June 6.

The demands include tech companies like Meta stopping scams at source, contributing to refunds for victims of fraud originating on their platforms and for a public register showing the scale of tech giants' failure to prevent scams.

"This should not be seen just as an issue for the UK's banking sector. It 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."

According to the letter, the big banks are not confident of voluntary measures to be placed on the technology and telecommunication sectors to deliver the change required to reduce the UK's attractiveness to fraudsters and prevent harm to customers.

Earlier, it was reported that 77 per cent of scams were happening on social media, online marketplaces and dating apps, especially WhatsApp and Facebook Marketplace.

Pakistan too isn’t immune to online fraud

Last month, the State Bank of Pakistan had said commercial and microfinance banks would be held responsible for lost account holder funds if they failed to take preventive measures to combat social engineering and other digital banking frauds on time.

“Banks are required to compensate the customers due to delay on their part in taking timely remedial and control measures such as delay in blocking digital channels, delay in raising dispute requests,” the central bank had said in a statement.

The warning came after an alarming increase in the number of complaints against fraud, particularly about digital transactions.

According to the State Bank, “With the increasing adoption and usage of digital banking in Pakistan by a large number of financial services users, fraudsters have been taking advantage of the lack of awareness among customers.”

“These new measures are part of wider SBP objective to enhance digital financial inclusion and promote digital financial services by creating and enhancing customer trust in the safety, security and soundness of the digital banking ecosystem.”