UK Enforces Compensation for Fraud Victims, Calls for Tech Firms’ Accountability

The UK has mandated banks to compensate victims of authorized push payment (APP) fraud, a prevalent scam where fraudsters impersonate trusted entities to lure victims into transferring money. As of October 7, banks are required to cover losses up to £85,000. This decision has sparked discontent among banks due to the financial burden it imposes, especially as many scams originate from social media platforms. UK digital bank Revolut criticized Meta, arguing tech companies should bear more responsibility. A proposal by the UK Labour Party suggests tech firms be accountable for fraud on their platforms, but its policy adoption remains uncertain. Despite the financial sector pressing for regulatory changes, complexity arises in implementing frameworks involving non-payment related social platforms. To combat rising internet fraud, regulators stress enhanced collaboration between banks and tech firms. Meta, facing pushback, advocates cross-industry cooperation, proposing initiatives like the Fraud Intelligence Reporting Exchange (FIRE) for shared anti-fraud efforts. Ongoing debates persist over the distribution of financial liability between banks, tech firms, and regulators.