It’s time for social media and technology companies to put a stop to fraud
Fraud is the most common crime in the UK. Every MP will have constituents who have lost money to fraudsters, with more than £1.2bn stolen by fraudsters last year alone.
We know the devastating impact this can have on the lives of people. That’s why four years ago, we took a bold decision at TSB: we promised to refund every customer that is an innocent victim of fraud. Since then, we’ve refunded over 97% of our customers who have been victims of this appalling crime.
And it is welcome news for consumers that the Government and Payment Systems Regulator (PSR) are mandating that, from next year, other banks must follow where TSB has led.
But putting right the victims of fraud can only be one part of the solution - the focus now needs to shift to preventing fraud from happening in the first place. Industry data shows that 78% of this fraud starts online. We need social media and tech companies to show the same level of responsibility, investment, and protection as the banks are providing– so together we can win the fight against fraudsters.
The TSB Fraud Refund Guarantee gives us unparalleled insight into the origin of fraud, allowing us to highlight new threats. For example, during Covid, we alerted the authorities and the public to emerging scams on PPE, vaccinations and NHS charity donations. In more recent times, our data shows the increasing levels of sophisticated fraud on social media platforms.
Around 80% of all the fraud cases refunded at TSB within the three most impactful fraud categories – investment, impersonation and purchase fraud – originate on social media platforms owned by Meta, including Facebook, WhatsApp and Instagram.
Based on current industry fraud levels, scams originating on Meta platforms alone could account for up to £250m of push payment losses to UK households in 2023. That’s why we’re sharing our insight with them, including on the £100k we’ve paid out to victims of fake Wilko adverts, following the collapse of the retailer and meeting their European leadership to discuss additional effective interventions that would stop fraud happening in the first place.
Social media and technology companies are a mainstay of our lives. Not only are they a key part of our economy, they also bring enormous benefits in bringing people together and allowing them to do more. But alongside this popularity must come greater responsibility to the tens of millions of people who use them. And, as long as the cost of fraud remains entirely with victims and their banks, these companies have no financial incentive to consistently prevent it.
The publication of the Government’s Fraud Strategy earlier this year, and the appointment of Anthony Browne MP as a new Anti-Fraud Champion are important first steps. But on increasing protections for consumers, the strategy currently proposes that social media and technology companies sign up to a voluntary charter.
It’s good news that all banks will soon start reimbursing their customers and highlighting their reimbursement rates, but to win the battle against fraudsters, we need all social media and technology companies to step up and fully play their part in consistently and effectively stopping fraud taking place on their platforms.
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