Barclays is calling on tech companies to reimburse scam victims as part of four major recommendations to tackle the nation’s fraud epidemic.
The call for action comes as Barclays data reveal that four in every five scams it encounters originate on tech platforms, including social media, online marketplaces, and dating apps.
Scams have surged by 24% in the last quarter, compared to the same time last year, says the UK bank. Purchase scams, where people buy goods which never arrive or aren’t as advertised, are the most common, accounting for two-thirds of all scams.
Investment scams, where victims are invited to invest in something that’s worthless or doesn’t exist, have resulted in the greatest losses, making up almost a third of all money lost to scammers, despite accounting for just five per cent of cases.
To counter the growing threat, Barclays has called on policy makers to bring together a cross-Government group within the Home Office with the ability to coordinate regulators, industry groups, and companies across different sectors to effectively fight scams. The bank says anti-scam efforts are currently fragmented, with many different groups working in siloes.
Equally, the Government should make the prevention of scams mandatory, particularly for tech companies, instead of the voluntary measures currently proposed.
"Tech companies are currently not liable for scams - we believe this needs to change through relevant regulation and legislation," states Barclays, adding that Ofcom should force these firms to publish data on the scams happening on their platforms, and the Payment Systems Regulator should also make payment service providers (PSPs) publish their data on the sources of scams.
Finally, the bank is calling for the creation of a victim reimbursement fund, financed by all firms whose systems and platforms are used to perpetrate scams, including tech companies and banks. The bank points out that it is currently just banks that fund reimbursements, despite tech platforms being the source of 87% of scams.
Matt Hammerstein, CEO of Barclays UK, says: “Our data shows that tech platforms - particularly social media - are now the source of almost all scams. However, there is no current legislative or regulatory framework obliging the tech sector to support the prevention of these crimes, as there rightly is for banks.
“Without the joint help of tech organisations, the Government, and regulators, we risk enabling the unchecked growth of what is now the most common crime in the UK, hurting countless individuals, and costing our economy billions each year.
“We can only drive back this epidemic - and protect UK competitiveness - by stopping scams at their source, preventing the flow of funds to organised crime.”