Financial news

Tide, a UK financial business platform with more than 500,000 SMEs, has urged the government to establish a new anti-fraud tax to fund and train more police officers to combat the rising fraud epidemic in Britain.

Although welcoming the government’s recently announced Fraud Strategy, Tide said that it needs to be “bolder and more ambitious”.

In the first half of 2022, criminals stole £610million through scams, which have become a significant problem for the UK’s economy. Tide is proposing the introduction of an anti-fraud tax on the value chain, including social media and telecoms companies, where the majority of scams originate, and faster payment transactions.

According to UK Finance, a trade association for banking and financial services, the vast majority of scams involve Approved Authorised Payment (APP) Fraud. Therefore, Tide is urging the government to fund UK law enforcement agencies with the tax collected to investigate and prosecute scammers, including those based abroad, under a zero-tolerance policy.

Tide CEO, Oliver Prill, said: “The target to cut fraud by only 10 per cent by the end of 2024 with another 400 police officers is nowhere near enough to combat the sheer scale of the problem and the damage done. This is why we are calling for a tax to fund action against what has become a terrible blight on the UK.”

Four recommendations

In an open letter, Tide has set out four policy recommendations to combat fraud, including the introduction of a zero-tolerance approach to law enforcement policy funded by an anti-fraud tax, mandatory data sharing, a re-think of rules that force financial institutions to reimburse all victims of authorised fraud, and a plan to give customers more choice about the level of fraud protection they seek.

Furthermore, Tide is urging ministers to adopt several mandates, such as for all financial institutions to take part in Confirmation of Payee and for social media and telecoms companies to maintain records of all their advertisers and users and feed this into Confirmation of Payee data. Tide is also urging mandatory reporting to the police of all instances of fraud by financial institutions and mandatory investigation of all fraud by the police.

Prill added: “Fraud pays in the UK and is attracting fraudsters from around the globe. Instead of guaranteeing returns to fraudsters through mandatory reimbursement, such money, alongside an anti-fraud tax, should be invested in fraud prevention and prosecution. We believe that our policy recommendations can help turn the tide on fraud.”