Fraud experts have once again urged the UK government to hold social media companies accountable amid a rising wave of fraud on multiple fronts.
UK Chancellor of the Exchequer Rachel Reeves is set to announce the Spring Statement next week. Ahead of the budget, stakeholders in the fraud prevention space are urging Reeves to prioritise the UK’s ongoing “fraud crisis”.
Jonathan Frost, Director of Global Advisory at BioCatch, said the UK has become the “fraud capital of the world,” adding that government action is “crucial to reverse this alarming trend.”
“Recently, it was revealed that scammers from Georgia defrauded savers of $35m using celebrity deepfakes, with UK citizens bearing the brunt, losing £9m. It’s clear the Online Safety Bill is failing to protect UK citizens and we need stronger action,” Frost said.
Fraud has been and will always be a battle of cat and mouse. However, global rates have surged in recent years. The UK has been especially impacted, notably by Authorised Push Payment (APP) fraud – where victims are tricked into transferring money to scammers posing as trusted individuals.
As fraud cases soared last year, pressure mounted on regulators. In response, the Payment Systems Regulator (PSR) introduced new reimbursement rules, requiring both sending and receiving firms to compensate APP fraud victims up to £85,000 equally.
The move sparked controversy. Silvija Krupena, Director of the Financial Intelligence Unit at RedCompass Labs, said: “[PSR’s] rushed APP fraud reimbursement rule created short-term fixes, wasted money, and let criminals stay ahead of regulators.”
Social media giants face growing scrutiny
A major criticism of the new APP rules is their absence to include social media platforms, where many scams originate. This has led to increasing calls for tech companies to be held accountable.
“The UK must adopt a holistic approach that focuses on prevention, not just reimbursement. Banks can’t be the sole line of defence; stronger collaboration across industries and law enforcement is essential to disrupt fraud at its source,” Frost added.
“Policing must also evolve to tackle digital fraud effectively and co-operate internationally to ensure that offenders are not beyond reach.”
As Frost highlighted, the government has passed the Online Safety Bill, a piece of legislation aimed at making digital platforms more accountable for harmful online content.
Krupena acknowledged that the bill was “a step in the right direction,” but argued it still fails to hold social media giants accountable for the scams spreading across their platforms.
She continued: “The majority of fraud now originates online, but there are still no meaningful penalties or incentives for tech firms to act.”
Suggested action
Both Frost and Krupena are hopeful that Reeves will address this gap in regulation in her upcoming statement. Frost has called for a coordinated strategy that leverages cross-industry intelligence and advanced technology. Without it, he warns, banks will “remain unfairly burdened” and fraudsters will continue to siphon away hundreds of millions.
Krupena believes AI-driven solutions are key to the future of fraud prevention – a technology already showing promise across the sector. However, as Payment Expert has learned from industry voices such as Logan Porter, Director of Solution Engineering at SEON, criminals are also using AI to enhance their tactics.
Prime Minister Keir Starmer looks as though he is putting in place the foundations to better address these challenges. He has taken a more relaxed stance on AI regulation, hoping to catalyse growth and innovation in the sector.
Starmer is also beginning to ease regulatory burdens in other areas. The PSR was recently dissolved in an effort to streamline oversight and make compliance simpler and cheaper for payments firms, many of which were previously regulated by three separate bodies.
Despite these moves, experts warn that action must come quickly. Krupena concluded: “It’s time the government matches criminals’ moves and works together with banks, law enforcement, social media firms and financial crime experts to outsmart them at their own game.
“If not, the gap between criminals and those fighting fraud will only widen.”
