Nearly six in ten (57%) people say tech giants – like Meta and TikTok – should share responsibility for reimbursing fraud victims with banks and building societies as ‘fraudemic’ sees one in ten targeted.
THE finding comes from a report published today by the Social Market Foundation (SMF) think tank, sponsored by Nationwide Building Society, providing new evidence about the impact of fraud on victims, and mapping out a 13-point plan to tackle the issue.
The SMF found that 57% of people support making digital platforms reimburse victims of fraud on their platforms, rising to 64% among fraud victims. The report also highlights that close to one in ten (9%) of the UK’s population fell victim to fraud in 2021-2022, in what the SMF refer to as a ‘fraudemic’.
It comes with the Government under pressure to make tech giants compensate fraud victims and bear some of the losses, in addition to banks and building societies. Yet the Payments Systems Regulator plans only to hold sending and receiving banks or building societies liable as things stand. The Online Safety Bill, which is making its way through Parliament and will soon become an Act, has provisions to make tech companies responsible for hosting scams and fraudulent content, but does not mention any responsibility for helping compensate victims.
But it isn’t just tech companies people believe need to up their game, as nearly three-fifths (58%) think the government are doing “less than enough” in their current efforts to address fraud.
The report is sponsored by Nationwide Building Society. The SMF retains full editorial independence.
The SMF polling on whether different private sector actors in the ‘fraud chain’ – the stages of the crime, from identifying a victim to securing victim’s assets – should be responsible for compensation showed that digital platforms were held the most responsible (64%), followed by the holding institution (63%), receiving institution (61%) and phone networks (53%). (See notes)
The SMF is calling for other organisations in the “fraud chain” to be made eligible to pay some of the reimbursement costs.
The SMF’s polling also found majority (70%) support for the introduction of more verification and checks into the payments system e.g, when money transfers between banks or building societies. When asked about future scenarios where new verification tools were developed to substantially lower fraud risk with the caveat that those tools may slow down payment and transfers further, 54% were in support, rising to 64% among fraud victims.
SMF’s 13 recommendations are aimed at increasing the responsibility for the private sector to both avoid frauds occurring in the first place and compensating victims. They include the following (full list of recommendations in the Notes):
- Increasing punishment for convicted fraudsters to deter criminals.
- Ensuring adequate reimbursement for victims and support for those who are vulnerable.
- Extending reimbursement beyond banks and building societies to include big tech.
- Building collective resolve through enhanced data sharing within the ‘fraud chain’.
- Enhancing friction for payments to enable deeper checks on senders and receivers.
Richard Hyde, SMF Senior Researcher, said:
“Despite the substantial detriment, political debates over crime often ignore the fraud threat – perhaps because it is less visible than other types of crime. But our research has shown the depth of suffering caused and how it is only becoming more pervasive in our society.
Preventing and giving victims proper support will require more effort from every actor in the ‘fraud chain’ to strengthen their checks and take responsibility for compensating victims.”
Jim Winters, Director of Economic Crime at Nationwide Building Society, said:
“Social media has become fertile ground for scammers, with controls seemingly yet to catch up with other industries, allowing criminals to all but freely target victims across their platforms. We will continue to reimburse those who have had their money taken through no fault of their own, but we need social media platforms, and other industries where scams start, such as big tech and telecoms to take more responsibility for reimbursement. We need a joint approach whereby social media platforms work with telecoms, financial services and government to stop fraud at the outset – not just after the criminals have struck. That can only be done by the seamless sharing of data and information between sectors.”