Banks urge tech firms to help victims of fraud

Barclays, TSB, Lloyds and Santander warn that Google and Facebook are not paying their fair share

Britain’s biggest banks are demanding that Facebook, Google and telecom giants pay hundreds of millions of pounds to help reimburse victims taken in by scammers on social media. Barclays, TSB, Lloyds and Santander said technology companies are not shouldering their share of the burden from the wave of online fraud gripping Britain. They are backing a “polluter pays” principle in which tech firms would be required to contribute to a compensation war chest for victims.

BRITAIN’S biggest banks are demanding that Facebook, Google and telecom giants pay hundreds of millions of pounds to help reimburse victims taken in by scammers on social media.

Barclays, TSB, Lloyds and Santander have warned that technology companies are not shouldering their share of the burden from the wave of online fraud gripping Britain.

They are backing a so-called “polluter pays” principle in which tech companies would be required to contribute to a compensation war chest for victims.

At present, banks sign up to a voluntary code to reimburse people who lose their life savings if they are taken in by criminals and the money cannot be recovered. About £462m was returned to customers in 2020 and 2021.

Facebook, Instagram, Google and telecom companies currently pay nothing towards losses, despite more than three quarters of scams taking place on social media, auction sites or dating apps, according to Barclays data.

Writing for The Daily Telegraph, Sian Mcintyre, head of economic crime at the bank, said: “We would like to see a crosssector pot funded by a polluter pays principle. Those companies that enable scams on their platforms or services should be putting money into that pot.”

Victims lost £583m last year to socalled “authorised push payment fraud”, where criminals use calls, texts, emails, fake websites and social media posts to dupe victims into handing over personal details and money. Losses were up more than a quarter compared with 2020.

Ms Mcintyre added: “A text message from a scammer is enabled by a telecom service and if a victim clicks on the fraudulent link this is facilitated by an internet service provider.

“If a customer clicks on a criminal advert on social media this will be hosted by a tech firm and when the victim parts with their funds their bank should attempt to block transactions.

“All companies and sectors involved in enabling scams should be mandated to regularly publish their data.”

Some high street banks have signed a voluntary industry agreement to reimburse “blameless” customers who fall victim to scams, but refund rates are low. Of the £583m lost last year, less than half was returned to customers.

Paul Davis, director of fraud at TSB, said “partial or total” funding from internet and technology giants towards fraud losses was “long overdue”, although he welcomed the steps some tech giants have taken to help prevent scams.

TSB offers a refund guarantee on most fraud losses, reimbursing 98pc of victims. Mr Davis said: “Not only is this the right thing for victims, it is also an incentive for us to stop fraud from happening in the first place. Until we see that same incentive among technology companies then they won’t do all they can to stop scams on their platforms.”

Liz Ziegler, financial crime director at Lloyds, said where fraud could not be prevented, big tech should consider with “industry and government whether they have a role to play in reimbursement”.

Chris Ainsley, head of fraud risk management at Santander, said: “It won’t be straightforward to get all stakeholders to share their scams data and work out a reimbursement model, but the fight against fraud won’t be able to move forward without it.”

A spokesman for UK Finance, the banking trade body, backed calls for online platforms and phone providers to help reimburse victims.

Google has come under fire from the Financial Conduct Authority for not doing enough to prevent fraudulent investment adverts on its search engine. Last year it pledged millions of pounds to run anti-fraud campaigns.

Both Google and Meta, the owner of Facebook and Instagram, said they now require most financial services adverts to be FCA authorised and that they take the safety of users seriously.