Bank chiefs tell Sunak to make big tech bear cost of fraud ‘pandemic’
The bosses of Britain’s biggest banks have told Rishi Sunak that technology companies must contribute to the cost of an online fraud “pandemic” that is undermining international investor confidence in the UK economy.
Sky News has obtained a letter to the prime minister signed by the chief executives of nine lenders, including Barclays, NatWest and Nationwide, in which they warned that the UK has become “a global hotspot for fraud and scams”.
They said the government’s National Fraud Strategy, unveiled last month, were inadequate to tackle the scale of the crisis, which they believe is costing more than £1bn every year to tackle.
The bank chiefs told the PM that £2,300 was stolen from British consumers every day last year by fraudsters.
And they said that they would consider taking further action “to protect our customers” without wider government intervention, including slowing down payments, which they described as “a useful but blunt instrument that will mean some customers and businesses will find their legitimate transactions held up”.
“Online fraud poses a strategic threat to the prosperity of the UK and impacts the credibility of, and confidence in, the economy and financial sector,” they said in the letter, sent on June 6.
They want tech companies to be responsible for stopping scams at source, to contribute to refunds for victims of fraud originating on their platforms and for a public register showing the scale of tech giants’ failure to prevent scams.
The banks’ collective intervention underlines growing frustration at the fact that big technology companies such as Meta Platforms, the owner of Facebook, Instagram and WhatsApp, are bearing so little of the financial burden generated by fraud.
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This week, TSB wrote to the New York-listed company to demand that it polices its social media operations more robustly.
The TSB chief executive, Robin Bulloch, was among the signatories to the joint letter to the PM.
The others were Dame Alison Rose, the NatWest CEO; Debbie Crosbie, Nationwide chief executive; Lloyds Bank Group chief Charlie Nunn; Ian Stuart, boss of HSBC UK; Matt Hammerstein of Barclays UK; Mike Regnier, CEO of Santander UK; Mikael Sorensen of Handelsbanken; and Anne Boden, the outgoing CEO of Starling Bank.
It was also signed by Bob Wigley and David Postings, respectively the chairman and chief executive of UK Finance, the banking lobby group.
In it, they urged Mr Sunak to take further steps to combat “the devastating impact fraud is having on people, businesses, and the UK economy”.
“Online fraud poses a strategic threat to the prosperity of the UK and impacts the credibility of, and confidence in, the economy and financial sector,” they said.
“This should not be seen just as an issue for the UK’s banking sector.
“It is having a material impact on how attractive the wider UK financial sector is perceived by inward investors, which as we know, is critical for the health of the City of London and wider UK economy.”
Billions lost to fraud
The chiefs highlighted a UK Finance report which concluded that £1.2bn was lost to fraud of all kinds last year, and welcomed the appointment of Anthony Browne, the Conservative MP and former British Bankers’ Association chief.
They told Mr Sunak that the overwhelming majority of scams targeting UK consumers “originate with a small number of tech firms, social media firms and telcos”.
“A fraud strategy that fails to mandate action on all actors involved in the fraud journey and collective responsibility for the harm done to consumers, will never be effective.
“We are not confident that voluntary measures to be placed on the technology and telecommunication sectors will deliver the change required to reduce the UK’s attractiveness to fraudsters and prevent harm to customers.”
They complained that banks’ efforts to tackle the issue were being impaired by the Financial Ombudsman Service, which they said had placed a disproportionate burden on their industry.
The bosses also said recent conversations with government officials had not instilled confidence in Whitehall plans to clamp down on fraud.
They called on Mr Sunak to make voluntary measures aimed at the telecoms and tech sectors mandatory, and said they should be forced to educate consumers on the security and data risks of making payments.
Bank chiefs told the PM that £2,300 was stolen from British consumers every day last year by fraudsters
Tech companies should also be obliged to provide more visible warnings to customers, the bank bosses said.
“One area that we believe requires urgent focus is that of the proliferation of purchase scams on META platforms, which is disproportionately higher than its peers,” they said.
“Tech firms, telcos and social media companies should bear responsibility for stopping scams at source and contributing to refunds when their platforms are used to defraud innocent victims.”
The bank chiefs claimed to have spent more than £500m in the last three years “building defences that help us stop more than £2bn a year in attempted fraud”.
Among their other requests to Mr Sunak was that data should be published regularly to name and shame tech companies over the level of fraud originating from their platforms.
“We can all see how these firms harvest user data for advertising revenue purposes: this in turn must offer ways to intervene to protect users from unscrupulous actors,” they said.
The bank chiefs also called on the government to be “more ambitious than the 10pc reduction [in online fraud] it is targeting which would still leave more than two million customers a year suffering harm.
“With collective commitment across the pillars the Strategy could be even more ambitious and aim for a more credible 25pc reduction in fraud.”
Business
Donald Trump’s tariffs will have consequences for globalisation, the US economy and geopolitics
For decades, trade and trade policy has been an economic and political backwater – decidedly boring, seemingly uncontroversial.
Trade was mostly free and getting freer, tariffs were getting lower and lower, and the world was becoming more, not less, globalised.
But alongside those long-term trends, there were some serious consequences.
Trump latest: US president announces sweeping global trade tariffs
Mature, developed economies like the UK and US became ever more reliant on cheap imports from China and, in the process, saw their manufacturing sectors shrink.
Large swathes of the rust belt in the US – and much of the Midlands and North of England – were hollowed out.
And to some extent that’s where the story of Donald Trump’s “Liberation Day” really began – with the notion that free trade and globalisation had a darker side, a side he wants to remedy via tariffs.
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Trump’s tariffs: Ed Conway analysis
He imposed a set of tariffs in his first term, some on China, some on specific materials like steel and aluminium. But the height and the breadth of those tariffs were as nothing compared with the ones we have just heard about.
Not since the 1930s has the US so radically increased the level of tariffs on all nations across the world. Back then, those tariffs exacerbated the Great Depression.
It’s anyone’s guess as to what the consequences of these ones will be. But there will be consequences.
Consequences for the nature of globalisation, consequences for the US economy (tariffs are exceptionally inflationary), consequences for geopolitics.
Imports from the UK will face a 10% tariff, while EU goods will see 20% rates. Pic: Reuters
And to some extent, merely knowing that little bit more about the White House’s plans will deliver a bit of relief to financial markets, which have fretted for months about the imposition of tariffs. That uncertainty recently reached unprecedented levels.
But don’t for a moment assume that this saga is over. Nothing of the sort. In the coming days, we will learn more – more about the nuts and bolts of these policies, more about the retaliatory measures coming from other countries.
We will, possibly, get more of a sense about whether some countries – including the UK – will enjoy reprieves from the tariffs.
To paraphrase Churchill, this isn’t the end of the trade war, or even the beginning of the end – perhaps just the end of the beginning.
Donald Trump has announced a 10% trade tariff on all imports from the UK – as he unleashed sweeping tariffs across the globe.
Speaking at a White House event entitled “Make America Wealthy Again”, the president held up a chart detailing the worst offenders – which also showed the new tariffs the US would be imposing.
“This is Liberation Day,” he told a cheering audience of supporters, while hitting out at foreign “cheaters”.
Follow live: Trump tariffs latest
He claimed “trillions” of dollars from the “reciprocal” levies he was imposing on others’ trade barriers would provide relief for the US taxpayer and restore US jobs and factories.
Mr Trump said the US has been “looted, pillaged, raped, plundered” by other nations.
Pic: AP
His first tariff announcement was a 25% duty on all car imports from midnight – 5am on Thursday, UK time.
Mr Trump confirmed the European Union would face a 20% reciprocal tariff on all other imports. China’s rate was set at 34%.
The UK’s rate of 10% was perhaps a shot across the bows over the country’s 20% VAT rate, though the president’s board suggested a 10% tariff imbalance between the two nations.
It was also confirmed that further US tariffs were planned on some individual sectors including semiconductors, pharmaceuticals and critical mineral imports.
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Trump’s tariffs explained
The ramping up of duties promises to be painful for the global economy. Tariffs on steel and aluminium are already in effect.
The UK government signalled there would be no immediate retaliation.
Business and Trade Secretary Jonathan Reynolds said: “We will always act in the best interests of UK businesses and consumers. That’s why, throughout the last few weeks, the government has been fully focused on negotiating an economic deal with the United States that strengthens our existing fair and balanced trading relationship.
“The US is our closest ally, so our approach is to remain calm and committed to doing this deal, which we hope will mitigate the impact of what has been announced today.
“We have a range of tools at our disposal and we will not hesitate to act. We will continue to engage with UK businesses including on their assessment of the impact of any further steps we take.
“Nobody wants a trade war and our intention remains to secure a deal. But nothing is off the table and the government will do everything necessary to defend the UK’s national interest.”
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Who showed up for Trump’s tariff address?
The EU has pledged to retaliate, which is a problem for Northern Ireland.
Should that scenario play out, the region faces the prospect of rising prices because all its imports are tied to EU rules under post-Brexit trading arrangements.
It means US goods shipped to Northern Ireland would be subject to the EU’s reprisals.
The impact of a trade war would be expected to be widely negative, with tit-for-tat tariffs risking job losses, a ramping up of prices and cooling of global trade.
Research for the Institute for Public Policy Research has suggested more than 25,000 direct jobs in the UK car manufacturing industry alone could be at risk from the tariffs on car exports to the US.
The Society of Motor Manufacturers and Traders (SMMT) had said the tariff costs could not be absorbed by manufacturers and may lead to a review of output.
The tariffs now on UK exports pose a big risk to growth and the so-called headroom Chancellor Rachel Reeves was forced to restore to the public finances at the spring statement, risking further spending cuts or tax rises ahead to meet her fiscal rules.
Read more:
What do Trump’s tariffs mean for the UK?
The rewards and risks for US as trade war intensifies
A member of the Office for Budget Responsibility (OBR), David Miles, told MPs on Tuesday that US tariffs at 20% or 25% maintained on the UK for five years would “knock out all the headroom the government currently has”.
But he added that a “very limited tariff war” that the UK stays out of could be “mildly positive”.
He said: “There’s a bit of trade that will get diverted to the UK, and some of the exports from China, for example, that would have gone to the US, they’ll be looking for a home for them in the rest of the world.
“And stuff would be available in the UK a bit cheaper than otherwise would have been. So there is one, not central scenario at all, which is very, very mildly potentially positive to the UK. All the other ones which involve the UK facing tariffs are negative, and they’re negative to very different extents.”
Business
Donald Trump’s tariffs will have consequences for globalisation, the US economy and geopolitics
For decades, trade and trade policy has been an economic and political backwater – decidedly boring, seemingly uncontroversial.
Trade was mostly free and getting freer, tariffs were getting lower and lower, and the world was becoming more, not less, globalised.
But alongside those long-term trends, there were some serious consequences.
Trump latest: US president announces sweeping global trade tariffs
Mature, developed economies like the UK and US became ever more reliant on cheap imports from China and, in the process, saw their manufacturing sectors shrink.
Large swathes of the rust belt in the US – and much of the Midlands and North of England – were hollowed out.
And to some extent that’s where the story of Donald Trump’s “Liberation Day” really began – with the notion that free trade and globalisation had a darker side, a side he wants to remedy via tariffs.
He imposed a set of tariffs in his first term, some on China, some on specific materials like steel and aluminium. But the height and the breadth of those tariffs were as nothing compared with the ones we have just heard about.
Not since the 1930s has the US so radically increased the level of tariffs on all nations across the world. Back then, those tariffs exacerbated the Great Depression.
It’s anyone’s guess as to what the consequences of these ones will be. But there will be consequences.
Consequences for the nature of globalisation, consequences for the US economy (tariffs are exceptionally inflationary), consequences for geopolitics.
Imports from the UK will face a 10% tariff, while EU goods will see 20% rates. Pic: Reuters
And to some extent, merely knowing that little bit more about the White House’s plans will deliver a bit of relief to financial markets, which have fretted for months about the imposition of tariffs. That uncertainty recently reached unprecedented levels.
But don’t for a moment assume that this saga is over. Nothing of the sort. In the coming days, we will learn more – more about the nuts and bolts of these policies, more about the retaliatory measures coming from other countries.
We will, possibly, get more of a sense about whether some countries – including the UK – will enjoy reprieves from the tariffs.
To paraphrase Churchill, this isn’t the end of the trade war, or even the beginning of the end – perhaps just the end of the beginning.
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