Tide proposes anti-fraud tax to fight scammers

Funding the fight against crime

With most scams involving Approved Authorised Payment (APP) Fraud – where victims are tricked into transferring funds to fraudsters - Tide is proposing the introduction of an anti-fraud tax on the value chain to fund the required law enforcement capacity. The tax would apply to social media and telecoms companies, where the majority of scams originate, as well as faster payment transactions. This would fund UK law enforcement agencies and make it mandatory for them to investigate and prosecute scammers, including those based abroad, under a zero-tolerance policy.

Tide is also recommending that the reporting of all instances of fraud by financial institutions become obligatory. Company officials said that fraud causes enormous harm and puts stress on small businesses, consumers, and financial institutions – and in the process, this damages the UK’s economy. The target to cut fraud by only 10% 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 they are calling for a tax to fund action against what has become a severe blight on the UK.

Tide is urging ministers to adopt:

• Mandates for all financial institutions (technically payment service providers) to take part in Confirmation of Payee (currently not all are);

• Mandates for social media and telecoms companies to maintain records of all their advertisers and users and feed this into Confirmation of Payee data;

• Mandating payment service providers to add risk assessment data;

• Mandatory reporting to the police of all instances of fraud by financial institutions;

• Mandatory investigation of all fraud by the police;

• Introduction of an anti-fraud tax on the value chain to fund the required law enforcement capacity.

Executives from the UK-based digital banking platform added that while a step in the right direction, the government’s new fraud strategy needs to be bolder and more ambitious. 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.