The Labour Party aims to hold tech companies accountable for compensating victims of online fraud and to eliminate existing regulations that primarily burden banks.
Online fraud costs the UK billions annually. Criminals exploit the internet anonymously, victimising people worldwide, and yet the Big Tech companies can avoid taking any responsibility due to weak laws.
In 2022, MPs urged tech giants like Facebook and Twitter to reimburse victims of fraudulent advertising. Current regulations need to be revised.
A leaked document reveals Labour’s criticism of tech companies for evading responsibility in combating online fraud and compensating victims. The focus is on authorised push payment (APP) fraud, where individuals unknowingly transfer money to fraudsters, often losing significant amounts that can have a devastating impact on their lives.
Britons lost £460 million to APP fraud last year, with 70 per cent involving nonexistent goods.
Labour insists that tech companies must step up and share the burden of tackling APP fraud and reimbursing victims. Their involvement is crucial in this fight. The plan is that Banks initially refund victims, later recouping costs from tech firms.
An oversight body will be set up to review evidence and determine tech companies’ contributions. The Economic Crime Act will be expanded to penalise tech companies failing to prevent scams.
So far, banks have indicated that they will oppose the Payment System Regulator’s decision to reimburse fraud victims for up to £415,000. Concerns arise about fintech firms.
