Barclays is urging tech companies to reimburse scam victims as part of four major recommendations aimed at addressing the UK’s growing fraud crisis.
The demand arises from Barclays data indicating that four out of five scams encountered by the bank originate on technology platforms such as social media, online marketplaces, and dating apps. Scams have surged by 24% in the last quarter compared to the same period last year, with purchase scams—where individuals pay for goods that never arrive or are misrepresented—being the most prevalent, constituting two-thirds of all scams.
Investment scams, which invite victims to invest in worthless or non-existent opportunities, have resulted in the largest financial losses, making up nearly a third of total scam-related financial damage, despite representing only 5% of all cases.
To combat this escalating threat, Barclays is calling on policymakers to establish a cross-Government group within the Home Office that can coordinate efforts across regulators, industry groups, and companies to effectively combat scams. The bank notes that current anti-scam efforts are fragmented, with different organizations working in silos.
Additionally, Barclays insists that the government should mandate scam prevention measures for tech companies, rather than leaving it to voluntary initiatives. “Tech companies are currently not liable for scams – we believe this needs to change through relevant regulation and legislation,” the bank states. It advocates that Ofcom require these firms to disclose data regarding scams on their platforms, along with the Payment Systems Regulator mandating payment service providers to publish scam source data.
Lastly, Barclays is pushing for a victim reimbursement fund to be established, supported by all firms whose platforms facilitate scams, including both tech companies and banks. Currently, only banks are responsible for these reimbursements, despite technology platforms being the source of 87% of scams.
Matt Hammerstein, CEO of Barclays UK, emphasizes, “Our data shows that tech platforms – particularly social media – are now the source of almost all scams. However, there is no existing legislative or regulatory framework that requires the tech sector to assist in preventing these crimes, as exists for banks.”
He warns, “Without the collaboration of tech organizations, the Government, and regulators, we risk enabling the unchecked growth of what is now the most common crime in the UK, hurting numerous individuals and costing our economy billions each year. We can only halt this epidemic—and safeguard UK competitiveness—by addressing scams at their source and curbing the flow of funds to organized crime.”