Innovate Finance calls on the Government to set up National Anti-Fraud Centre

Janine Hirt, CEO at Innovate Finance, points out that fraud accounts for over 40% of crime but receives less than one percent of police resources.

"Given the scale of the threat posed to consumers and businesses alike, we urgently need a more collaborative, targeted, and effective strategy that aspires to smash fraud in the UK," she says. “This plan sets out how we can harness technology via data sharing to strengthen collaboration between industry and law enforcement. Current data sharing initiatives, while effective, operate in silos, which can make it difficult in practice. Critically, there is nothing in place with the critical mass or scale required to crush organised fraud. There is widespread agreement that establishing a National Anti Fraud Centre would be the appropriate vehicle to deliver this."

The trade body is calling for central leadership across the variety of data-sharing initiatives, aligned with effective data sharing, collection, and analysis between finance firms, regulators, law enforcement, technology platforms and telecoms networks.

Says Hirt: “We also need to update our laws, including the Online Safety Act 2023, to make tackling crime a shared responsibility between payment providers and the social media and telecommunications firms that allow fraud to take place on their platforms."

In this respect, the strategy also calls for the introduction of new shared liability rules to ensure Big Tech social media and telecommunications firms do more and tackle fraud being conducted on their platforms.

Currently, a significant proportion (77%) of Authorised Push Payment (APP) fraud originates online. Digital social platforms are the single largest source of fraud origination. Recent data from Revolut shows that Meta platforms (Facebook, Instagram, WhatsApp) collectively accounted for 54% of all scams reported to the firm globally.

However, it is payment service providers (PSPs) who are currently held solely responsible for reimbursing victims of fraud, leaving a significant responsibility gap and a lack of incentive for social media and telecommunications platforms.

The report calls on the Government to amend the Online Safety Act 2023 to establish a fraud origination redress fund - for telecommunications firms and social media platforms to pay into and to create a distribution mechanism - to issue reimbursements from responsible parties.

“By acting now, the UK Government can lead the way in tackling fraud, protecting consumers and reinforcing its position as a global leader in secure and innovative finance,” says Hirt.