HSBC has backed calls for tech firms to help cover the cost of fraud, saying new compensation rules will not be enough to stop scams. The Payment Systems Regulator (PSR) is set to make reimbursement of up to £85,000 mandatory from 7 October, with most firms failing to sign up to or consistently apply a voluntary industry code introduced in 2019.
The bank says new UK compensation rules will fail to curb APP scams and prove the financial sector is not the problem, as it backs calls for tech firms to pay up for fraud.
The government has yet to take action against tech and social media companies, instead asking them to sign a voluntary charter against online fraud. Data from UK Finance shows that losses from authorised push payment fraud totalled £459.7m in 2023, with the total number of cases reaching 232,429.
David Callington, Head of Fraud at HSBC “The wider ecosystem and the key players in that ecosystem must be held accountable.
“Banks need to be vigilant, but financial obligations must also be met by other sectors. They need financial incentives.
“We urge that some of these obligations be transferred to regulation, so that other sectors that are part of the ecosystem are actually obliged to act and protect those who are our common customers, our common users.
“However, regulators will only step in when they see that the efforts being made to prevent fraud are insufficient and that we are not generating the expected results from the voluntary aspects that have been put in place.”
