84% Believe Tech and Internet Companies Should Share the Burden of Fraud Costs, Study Reveals

A new study has found that more than 8 in 10 people believe tech and internet companies should help banks reimburse fraud victims.

The survey, conducted by the Social Market Foundation on behalf of Santander UK, polled 28,000 individuals across 15 countries, including the US, UK, Japan, Australia, and France.

Participants were asked whether different sectors should contribute to covering "some" of the costs associated with individual fraud losses. An overwhelming 84% of respondents said internet and telecom providers should help, while 88% felt social media and tech firms should contribute. The highest support, at 91%, was for banks and payment companies being responsible for a share of the costs.

“Potential policy measures which could help tackle [fraud] in countries like the UK, were popular amongst the public in each of the 15 countries we surveyed,” the report noted.

These findings come at a crucial time, as UK banks are currently urging other sectors to assist with the rising costs of compensating fraud victims. Starting October 7, new regulations will make banks and payment companies liable for compensating those affected by fraud. Initially, the maximum compensation threshold was set at £415,000 per customer, but following significant lobbying by banks, payments firms, and politicians, this figure was reduced to £85,000.

Despite the reduction, many UK banks remain dissatisfied with the new rules, arguing that the responsibility should not fall solely on their shoulders. Earlier this month, HSBC stated that tech firms should also contribute to the cost of fraud compensation.

At present, UK government bodies have only requested that tech companies sign a voluntary charter committing to anti-fraud measures, but they have not been asked to financially assist in covering losses.

The Social Market Foundation's study also highlighted that UK victims of fraud are more likely to be compensated compared to those in other countries. Roughly half of UK victims receive some form of reimbursement, in contrast to an average of one-third in the other nations surveyed.

However, consumer groups have emphasized the need for the new UK compensation rules, stating there remains a “compensation lottery” among banks. Some lenders, like Nationwide, refund up to 96% of reported fraud cases, while in other institutions, that figure drops below 10%. 

By fLEXI tEAM