High street bank bosses warn of rising fraud threat from social media
Bosses from the UK’s biggest high street banks have told MPs that social media companies could do more to prevent the increasing amount of fraud originating on their platforms.
UK chief executives from Barclays, Lloyds, Natwest and Santander said in a Treasury Committee session that they were doing more work with social media and telecommunications firms to prevent fraud but that there was still progress to be made.
“The levels of fraud are increasing, and the impacts on customers are life changing,” Natwest CEO Paul Thwaite told MPs. “Banks can only do so much, but we really need to get a whole variety of sectors involved to address this.”
Latest data from banking trade body UK Finance showed Britons lost £580m to scams in the first half of 2023 alone. The Home Office has said fraud is the most common crime in England and Wales, making up around 40 per cent of offences.
Charlie Nunn, the CEO of Lloyds Banking Group, said this figure was now closer to 50 per cent, with “somewhere between 70 and 90 per cent [of fraud cases] in any one period” stemming from online sources.
“There has been progress, some telecommunications specifically and some tech firms – others are behind” he added. “But it’s not enough. And if you look at the growth in fraud that we are seeing, we really need to work together and have more tools to work with those organisations to help us manage fraud.”
The PSR has introduced new rules making sending and receiving payment firms equally liable for reimbursing authorised push payment (APP) fraud up to a limit of £415,000.
Some within the industry have criticised the measures for placing a disproportionate amount of responsibility on payment firms, rather than social media companies.
The government also plans to give banks an additional 72 hours to investigate potential fraud when money is transferred – up from the current period of 24 hours.
Vim Maru, CEO of Barclays UK, told MPs that he wanted to see mandatory requirements across “all the parties” to prevent fraud.
“We’re all committed to what the PSR is doing and the reimbursement scheme, but that’s not where the focus should be,” Nunn said.
“Helping reimburse people is really important – it’s far more important to stop them becoming victims in the first place.”
The bosses added that they were improving their fraud reimbursement rates ahead of PSR’s new rules, which are due to come into force in October.
The Payment Systems Regulator (PSR) last October published a league table ranking banks and other payment firms on their APP fraud reimbursement rates and accounts used by fraudsters.
The data showed that TSB refunded 94 per cent of customer fraud claims in full in 2022, while the figure for Monzo was just six per cent.
Maru said Barclays had fully reimbursed 82 per cent of fraud claims last year and partially refunded 12 per cent, slightly up from figures of 79 per cent and 13 per cent respectively in 2022.
Thwaite told MPs that Natwest either fully or partially reimbursed 92 per cent of fraud claims last year, up from 76 per cent in 2022.
Mike Regnier, CEO of Santander UK, said its 2023 figures were “quite different” from 2022 and “similar” to those from Barclays and Natwest. The bank fully reimbursed 54 per cent of claims in 2022 and partially reimbursed 29 per cent.