Elven Big Tech firms and social media platforms have signed up to a UK Online Fraud Charter to combat rising levels of scams from fake adverts and romance fraud.
UK banks have long been campaigning for social media firms to take more responsibility for fraud that originates from their platforms.
Under the new Charter the companies, which include Amazon, eBay, Facebook, Google, Instagram, LinkedIn, Match Group, Microsoft, Snapchat, TikTok, and YouTube, have pledged to verify new advertisers and "promptly" remove any fraudulent content.
There will also be increased levels of verification on peer-to-peer marketplaces and people using online dating services.
While the initiative has been billed as a major breakthrough in cracking down on fraud, many in the banking industry remains unimpressed. Barclays, for example, says the the Government should make the prevention of scams mandatory, particularly for tech companies, and that they should be financially liable for fraud that starts on their platforms.
Barclays data reveal that four in every five scams it encounters originate on tech platforms, including social media, online marketplaces, and dating apps.
Others have cautiously welcomed the initiative as a step in the right direction.
“We’ve campaigned for years for tech companies to do far more to prevent the fraud that's become rife on social media platforms," said Paul Davis, director of fraud prevention at TSB. "Now we have the Charter, it's down to all signatories to match their commitment with meaningful concerted action - putting the right protections in place to reduce fraud and take responsibility to protect millions of consumers on their platforms."
Liz Ziegler, fraud prevention director at Lloyds Banking Group, comments: "This action is vital given 80 per cent of scams start online and we look forward to seeing tech firms move with seriousness and pace to address the fraud their users are falling victim to, with the government holding them to account."