Repay online scam victims, banks told

BANKS must reimburse victims of social media scams, the Government has ruled, in a major victory for tech giants.

Barclays, TSB, Lloyds and Santander last year accused companies including Meta and Google of failing to help shoulder the burden of the online fraud epidemic gripping the UK and called on them to repay victims hundreds of millions of pounds.

The banks also called for telecoms companies to help share the costs, as many scams are carried out over text message or email.

The so-called “polluter pays” principle was backed by a Lords select committee, which urged the Government to adopt a new system for compensation.

But the Government has rejected the calls, insisting that banks should be held solely responsible.

“Payment service providers are responsible for ensuring that their anti-fraud systems are effective,” the Government responded. The decision marks a victory for big tech companies, which have come under fire from the City watchdog for failing to stamp out fraudulent investment adverts.

Money-saving expert Martin Lewis last year branded Silicon Valley firms “flaccid” and “pathetic” in their approach to tackling scams and accused the Government of “abrogating responsibility” through delays to new legislation.

Data published by Barclays also showed more than three quarters of scams took place on social media, auction sites or dating apps.

In its response document, the Government also rejected a number of other proposals put forward by the Lords committee aimed at cracking down on fraud.

These included calls for compulsory ID checks on dating apps and the creation of new laws that would make identity theft a specific criminal offence.

The Government said the Online Safety Bill would ensure that tech firms “more effectively prevent fraud on their platforms”.