Banks v tech companies

80% of push payment fraud-where victims make the payment themselves-stems from online sources according to UK finance, the financial services industry body. This compounds an already dangerous trend which sees fraud as the most common crime in the UK, with a staggering amount occurring online. 

This information comes as banks such as Lloyds and tech companies such as Meta butt heads over who exactly should be paying compensation to the victims.  At present after signing up to a voluntary code in 2022, banks have returned almost £300 million to victims of authorised push payment fraud. With there being a likelihood that they will be on the hook even more, with it likely to become mandatory for scam victims to be reimbursed across the UK, banks are starting to put the pressure on tech companies.

What makes the anger that banks are feeling about this even more potent, is that recent research from Lloyds Banking Group has found that on Meta someone gets defrauded every seven minutes. With platforms such as Facebook Marketplace and Instagram account for almost half of all purchase scams. 

So, what has been the response from the tech platforms themselves?

At present they have to take steps to tackle fraud thanks to the Online Safety Act, and if they volunteer to follow the Online Fraud Charter, they must further follow strict measures to stop people being scammed. However, research by Which? Has found that these measures have done nothing, as scam ads are still littering tech platforms. 

Tech platforms are pushing back claiming that they are taking steps to address the issue, but at the current rate, many argue that it simply isn’t enough. Whether tech platforms act or not will depend on whether they feel they have skin in the game. The reputational damage that comes from this may be enough to push them to act.