Social media firms should reimburse online fraud victims, say UK bankers

theguardian.com:

The boss of the banking industry body UK Finance has called on social media companies to reimburse victims of online fraud, accusing them of “profiting” from scams taking place on their platforms.

Figures from its fraud report show that 78% of authorised push payment scams, where a victim is tricked into approving a transaction, started online in the second half of last year, with about three-quarters of those beginning on social media.

The chief executive of UK Finance, David Postings, said: “I would note that the banking sector is the only sector reimbursing at the moment, and our belief is that the burden should be spread … I think [tech companies] should be putting their hands in their pockets, particularly as they profit from it.”

Postings welcomed measures in the online safety bill going through parliament that will requiretech and social media platforms to remove scam adverts, but said the government had missed an opportunity by not including rules on reimbursement by social media companies in its recently published fraud strategy.

“If we’re going to have a position where people are reimbursed, it seems fair that the tech companies ought to be part of that because, ultimately, that they are currently profiting from the generation of this fraud, and that can not be right,” he said.

Last week, TSB urged social media firms to take “financial liability” for scams occurring on their platforms.

Responding to Thursday’s UK Finance report, the bank’s director of fraud prevention, Paul Davis, said: “Action from social media firms and phone companies to reduce fraud is also crucial – as these sectors must take more responsibility for their users’ safety.”

The report also revealed that lost and stolen bank and credit card fraud