Britain’s biggest banks and most prominent consumer campaign group have joined forces in a rare show of unity to urge ministers to accelerate action to tackle Britain’s online fraud epidemic.
Sky News has obtained a joint letter from UK Finance, the main lobbying group for UK lenders, and Which? to three cabinet ministers including Rachel Reeves, the chancellor, and home secretary Yvette Cooper.
Sent earlier this month, it argued that technology and telecoms companies risked missing a government-imposed deadline to provide an update on their efforts to curb online fraud, and demanded that more action was urgently needed.
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They argued that voluntary anti-fraud initiatives had so far “had no meaningful impact on the scale of fraud”, citing data showing that nearly three-quarters of authorised push payment (APP) fraud – which involves criminals tricking people into transferring them money – originated online, with 16% starting on telecommunications networks.
“While some firms are making efforts, it’s clear that not all of them are taking the problem seriously enough,” the letter said.
“Before the election the Prime Minister highlighted the role the financial services sector plays in supporting customers who’ve been defrauded, including through the Payment Systems Regulator’s (PSR) newly introduced mandatory reimbursement scheme for APP fraud victims.
“He also outlined the need for big tech to step up and do more, calling for these firms to have a ‘clear obligation’ and ‘financial incentive’ to work with banks and law enforcement agencies to identify and stop fraudsters from targeting UK consumers.
“Which? and the banking sector wholeheartedly agree.”
The groups referred to statistics showing that nearly £1.2bn was stolen through payment fraud in 2023 – equivalent to more than £2,000-per-minute.
UK Finance and Which? called on ministers to ensure that the cost of dealing with fraud was shared with tech and telecoms companies, and to “accelerate the publication of a Fraud Strategy in which it sets out its plans to close gaps in consumer protections, especially in relation to online advertising outside of the scope of the [Online Safety Act], and to improve consumer protections from scam calls and texts”.
Pressure has been growing for companies such as Meta – owner of Facebook, Instagram and WhatsApp – to contribute financially to the growing cost of online fraud, but the latest demand comes at an awkward time for ministers, with suggestions that big tech companies are to be spared an £800m digital tax amid negotiations aimed at staving off President Trump’s tariffs on UK companies.
“The problem isn’t just a financial one,” the joint letter said.
“Fraud is a pernicious crime that can cause severe psychological and emotional harm to victims.
“Which? research from 2023 calculated the impact on the wellbeing of consumers who’ve fallen victim to online scams as equivalent to the cost of £7.2bn per year.
“Some victims have reported changes in their behaviour and a loss of trust in the online world. In the long run, this is likely to have knock-on effects on consumers’ willingness to try new products and services, which is compromising economic growth.”
The two groups argued that while the Online Safety Act would prevent some online fraud being committed, ministers needed to go further.
“It is deeply concerning that the regulator [Ofcom] previously announced it was delaying the implementation of the codes for paid-for fraudulent advertising by over a year, meaning that the Act will not be fully enforced until 2027 at the earliest.
“The government must ensure Ofcom not only swiftly implements these codes, but that the codes themselves are sufficiently robust to effectively reduce the volume of fraudulent advertising online.
“We ask that you publicly call for these provisions to be in place as soon as practically possible to provide much needed reassurance to consumers.”
Content Source: news.sky.com