Nicola Sharp of financial crime specialists Rahman Ravelli considers their argument.
Banks are calling on some of the world's biggest tech firms to take some financial responsibility for the losses caused by online fraud.
TSB, Barclays, Santander and Lloyds have criticised Facebook, Instagram, Google and some telecommunications organisations for not paying anything towards the losses incurred by fraud and for not volunteering to reimburse victims. The banks believe that the tech giants should contribute towards controlling both the risk of online fraud and its impact.
The banks' approach is based on the principle of "polluter pays'' – that those who create the problem should take responsibility for putting it right.
With an estimated £462 million having been paid to financial crime victims during 2020 and 2021 without the money ever being recovered, the banks are pointing to fraudsters' use of online activity to make illegal gains. The banks are arguing that the tech firms that provide such facilities should be making a financial contribution to rectify the damage that is caused.
Some banks have said that a partial or total contribution towards the cost of online fraud is long overdue from the tech firms and have said that discussions need to take place with government to devise the necessary measures.
A first glance at the statistics indicates that the banks have an arguable case. With digital fraud in Britain on the increase and recent reports from Barclays stating that over 75% of online scams are from social media, auction sites and dating apps, it seems unjust that the banks are the only ones currently reimbursing victims.
But it will be interesting to see whether the social media sites and telecommunications companies agree to contribute or whether they believe they can continue to let others try to manage what is an ever-increasing problem.
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