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City comment: Don’t just pass the buck to banks on the fraud epidemic

·2-min read
The rise of digital banking and technology has sparked an explosion in online fraud.  (PA Archive)
The rise of digital banking and technology has sparked an explosion in online fraud. (PA Archive)

The Government needs to stop pretending the epidemic of fraud sweeping the nation is just a problem for the banks.

Trade body UK Finance publishes stats this morning showing impersonation scams more than doubled to 33,115 in the first half of the year. Unsuspecting folk were duped into parting with their money by fake texts, emails, and phone calls. Anyone who has received a suspicious message claiming to be from Royal Mail and asking you to pay a delivery charge will know what I’m talking about.

Impersonation scams are just part of what Financial Conduct Authority chair Charles Randell has called an “epidemic” of financial crime sweeping Britain. Digital banking and other innovations have made it easier than ever for fraudsters to filch cash.

The Government sees this as the banking industry’s problem. Banks are doing their bit, throwing huge amounts of money at the problem and claiming to have blocked fraudsters from taking around £6.70 in every £10 they tried to nick last year. But insiders complain that the deluge is simply too great for banks to deal with alone.

The Online Safety Bill, which is currently winding its way through Parliament, is an opportunity to help. As it stands, it will force tech giants like Facebook and Google to take more responsibility for the user-generated content on their platforms. But it currently falls short when it comes to fake ads and cloned websites appearing on social and search.

This is a major loophole. As TSB chief executive Debbie Crosbie recently pointed out, it means tech giants aren’t just not required to crackdown on this type of fraud - they actually inadvertently profit from it.

“They’re effectively making money from them through advertisements,” Crosbie told the Mail on Sunday.

Politicians should close this loophole and make cash-rich tech giants devote more resources to cracking down on fraud.

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