LONDON--(BUSINESS WIRE)--Tide, the leading financial business platform which represents more than 500,000 SMEs in the UK, is calling on the government to introduce a new levy to fund and train more police officers to fight Britain’s fraud epidemic.
This week the government released its new Fraud Strategy. The fintech platform, used by more than 9% of the UK’s small businesses, said while it welcomes the creation of a National Fraud Squad with 400 new investigators, this is ‘nowhere near enough’ to combat the 2.7 million scams carried out on the British public each year1. In the first half of 2022, criminals stole £610 million through scams2, according to UK Finance, a trade association for banking and financial services.
With the vast majority of scams involving Approved Authorised Payment (APP) Fraud – where victims are tricked into transferring funds to fraudsters - Tide is proposing the introduction of an anti-fraud tax on the value chain to fund the required law enforcement capacity. The tax would apply to social media and telecoms companies, where the majority of scams originate, as well as faster payment transactions. This would fund UK law enforcement agencies and make it mandatory for them to investigate and prosecute scammers, including those based abroad, under a zero-tolerance policy.
Tide is also recommending that the reporting of all instances of fraud by financial institutions become obligatory.
Oliver Prill, CEO of Tide, said: “Fraud causes enormous harm and puts stress on small businesses, consumers and financial institutions – and in the process, this damages the UK’s economy. The target to cut fraud by only 10% by the end of 2024 with another 400 police officers is nowhere near enough to combat the sheer scale of the problem and the damage done. This is why we are calling for a tax to fund action against what has become a terrible blight on the UK.’’
Tide has set out four policy recommendations:
- Zero-tolerance approach to law enforcement policy funded by an anti-fraud tax
- Mandatory data sharing
- Re-think of rules that force financial institutions to reimburse all victims of authorised fraud
- Plan to give customers more choice about the level of fraud protection they seek.
Tide is urging ministers to adopt:
- Mandates for all financial institutions (technically Payment Service Providers) to take part in Confirmation of Payee3 (currently not all are)
- Mandates for social media and telecoms companies to maintain records of all their advertisers and users and feed this into Confirmation of Payee data
- Mandating Payment Service Providers to add risk assessment data
- Mandatory reporting to the police of all instances of fraud by financial institutions
- Mandatory investigation of all fraud by the police
- Introduction of an anti-fraud tax on the value chain to fund the required law enforcement capacity
Oliver adds: “While a step in the right direction, the government’s new fraud strategy needs to be bolder and more ambitious. Fraud pays in the UK and is attracting fraudsters from around the globe. Instead of guaranteeing returns to fraudsters through mandatory reimbursement, such money, alongside an anti-fraud tax, should be invested in fraud prevention and prosecution. We believe that our policy recommendations can help turn the tide on fraud.”