Fintech trade body Innovate Finance is urging the UK Government to establish a National Anti-Fraud Centre aimed at facilitating cross-sector data sharing and to implement shared liability for social media and telecommunications companies.
Janine Hirt, CEO of Innovate Finance, highlights that fraud constitutes over 40% of crime, yet only receives less than one percent of police resources. Hirt emphasizes the need for a more collaborative and targeted strategy to combat fraud in the UK, stating, “This plan outlines how we can leverage technology through data sharing to enhance collaboration between the industry and law enforcement. Current data sharing initiatives operate in silos, making effective action challenging. There is a consensus that a National Anti-Fraud Centre is essential to achieve the scale required to dismantle organized fraud.”
The organization is advocating for centralized leadership across various data-sharing initiatives, ensuring effective collaboration among finance firms, regulators, law enforcement, technology platforms, and telecommunications networks.
Hirt further asserts the necessity of updating laws, including the Online Safety Act 2023, to make combating fraud a collective responsibility shared by payment providers and the social media and telecommunications companies that facilitate fraud on their platforms.
The proposed strategy includes introducing shared liability rules to compel major tech and telecommunications firms to take a more active role in addressing fraud occurring on their platforms. Currently, a significant portion (77%) of Authorised Push Payment (APP) fraud is sourced online, with digital social platforms being the largest contributors to fraud incidents. Recent data from Revolut reveals that Meta platforms (Facebook, Instagram, WhatsApp) accounted for 54% of all scams reported to the firm globally.
At present, payment service providers (PSPs) bear the sole responsibility for reimbursing victims of fraud, which creates a substantial responsibility gap and diminishes incentives for social media and telecommunications platforms to take action.
The report urges the Government to modify the Online Safety Act 2023 to establish a fraud origination redress fund, compelling telecommunications firms and social media platforms to contribute to and facilitate reimbursements to affected individuals.
“By taking decisive action now, the UK Government can set a precedent in the fight against fraud, safeguarding consumers and reinforcing its status as a global leader in secure and innovative finance,” Hirt concludes.