'Fraudemic' affecting one in ten people, poll finds
A report by the Social Market Foundation (SMF) has revealed almost 60 per cent of people believe tech giants should share responsibility in refunding fraud victims.
Sponsored by Nationwide Building Society, the findings analysed the impact of fraud on victims, revealing the “fraudemic” crime spree sees one in ten targeted.
In the midst of growing pressure for the UK Government to take further action for digital platforms to be made accountable, the report also revealed a majority believe the government is doing “less than enough” in its strategy against fraud.
Hoping to help shape a strategy so platforms prevent fraud and help in victim compensation, the study also outlined a list of guidelines. Some recommendations include harsher punishment to deter criminals and better data sharing within the “fraud chain”.
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. However, 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.”
Early this year, writing for the Times, the head of fraud at TSB bank, Paul David, explained most fraud is “out of the bank’s control due to glaring vulnerabilities from tech firms, telecoms companies and social media”. He also claimed Meta accounted for 80 per cent of the bank’s refunds on purchase fraud.
Despite these calls for further share in responsibility, last June, the Payment System Regulator announced plans to make reimbursement for authorised push payment (APP) fraud – which could account for a loss of over £1bn over coming years, according to an analysis by ACI Worldwide and GlobalData – mandatory for banks and building societies only.
The UK Government also dropped plans to make tech firms contributing to victim compensation part of the National Fraud Strategy.
Similarly, The Online Safety Bill – which is set to become an Act in the coming weeks – will make tech companies responsible for fraudulent content yet does not mention re-funding fraud victims.
The situation led a conglomerate of financial organisations, including Barclays and Nationwide, to write to Prime Minister Rishi Sunak demanding change, claiming that the UK is becoming a fraud “hotspot”, drawing potential investors away.
Jim Winters, director of economic crime at Nationwide, 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 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.”
Other findings from the report show most people support further security measures in payment systems, even if this slows down transfer processes.
The SMF research included two surveys featuring general UK citizens and victims of fraud as well as interviews with people from diverse demographics.