UK anti-fraud group increases pressure on Big Tech to fight scams

An unusual alliance of big banks and telecoms companies is trying to convince tech giants to help them fight financial fraud in the UK, adding to pressure after MPs, police and regulators all called on the industry to do more.

Online marketplace eBay has become the first major tech group to say it is open to joining Stop Scams UK, a new group backed by all of the country’s big banks and telecoms groups including Vodafone and BT, as the sector faces a growing threat of legislation to force them to take action.

UK consumers lost more than £1.2bn to fraud in 2020, according to figures published by trade group UK Finance last month.

The surge in activity has put a particular strain on banks. NatWest, for example, now spends as much detecting fraud and compensating victims as it does operating its entire branch network, according to two people briefed on its figures.

Stop Scams UK is working on measures, including a way for customers to safely contact their bank if they suspect “phishing” — a fraudulent message or call — but said the support of tech groups was important.

Ruth Evans, SSUK chair, said: “It is incredibly important that there is shared responsibility and commitment to stop scams . . . although we have now begun to do fantastic cross-sector collaborations, we would be able to do so much more” if major tech companies were on board.

Criminals have been quick to take advantage of social media and other tech channels: the most common scam reported to Lloyds Banking Group involves customers paying for items from an online store such as Facebook Marketplace via bank transfer, only to discover the item never existed and the seller disappeared after receiving payment.

Much attention has focused on encouraging banks to compensate victims, but banks are concerned about rising costs and believe other companies should share some of the burden, particularly those that earn money from fraudsters advertising on their platforms. 

One senior banker said: “If you’ve been scammed on Facebook Marketplace, why can’t Facebook help with putting that customer right?” 

Ashley Hart, SSUK board director and head of fraud at TSB, said: “There’s a big debate about reimbursement, but the discussion is only going to be solved to everyone’s satisfaction by reducing the amount of fraud that takes place in the first place.”

Executives at several of the UK’s largest banks have privately lobbied groups including Amazon over the past year but made little progress. However, they are hopeful that a broader group such as SSUK will encourage them to change.

SSUK contacted several tech companies when it was first being established last year, but none joined the initiative. However, Evans said she had received positive replies from several companies after writing to them again last month.

Ebay told the Financial Times it was “open to supporting Stop Scams UK”, though stressed that conversations were in their early stages. Facebook said that “we have met with and continue to engage with Stop Scams UK”, and highlighted several of its own recent internal anti-fraud projects.

Google also pointed to its own internal initiatives, but declined to comment on talks with SSUK. Amazon did not respond to a request for comment.

Tech companies face pressure on several fronts to change their approach to fraud. Last Sunday, MPs on the work and pensions committee complained that regulators “appear powerless” to hold them to account. 

Senior police officers told the committee this year that online fraud should be included in the Online Safety Bill, which threatens tech companies with fines if they fail to rapidly remove illegal content.

Bank of England governor Andrew Bailey backed this approach in a letter last month, and has also thrown his weight behind SSUK. Bailey attended a recent SSUK roundtable with the heads of several banks and telecoms companies, and said: “Fraud today is a major problem in our society and our economy. Turning the tide requires a significant cross-sector effort . . . so I look forward to the progress that we can make with full engagement from the technology sector.”