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Industry Reacts as Big Tech Firms Sign UK Online Fraud Charter: ‘Big Step’ or ‘Low-Priority Item’?

Online scams, fake adverts, AI-generated celebrity endorsements and romance fraud are just some examples from a long list of techniques used by fraudsters targeting victims on social media platforms. Now, some of the world’s largest tech companies have pledged to enact additional efforts to block and remove fraudulent content from their sites. 

With fraud being the most common crime in the UK, the government has joined forces with leading tech companies including Amazon, eBay, Facebook, Google, Instagram, LinkedIn, Match Group, Microsoft, Snapchat, TikTok and YouTube – to develop and commit to the Online Fraud Charter, the first agreement of its kind in the world.

Services will commit to introducing a range of new measures, with the ultimate aim of protecting people from fraud and scam content when using their sites.

Actions include enhanced verification techniques for new advertisers and promptly removing any fraudulent content. There will also be increased levels of verification on peer-to-peer marketplaces, and people using online dating services will have the opportunity to prove they are who they say they are.

James Cleverly, the Home Secretary, and anti-fraud champion Anthony Browne hosted representatives of these companies to sign the pledge on Thursday 30 November. All signatories have pledged to implement the measures which apply to their companies within six months.

Prior to the signing, Cleverly explained: “The Online Fraud Charter is a big step forward in our efforts to protect the public from sophisticated, adaptable and highly organised criminals.

“An agreement of this kind has never been done on this scale before and I am exceptionally pleased to see tech firms working with us to turn the tide against fraudsters.

“An agreement of this kind has never been done on this scale before”

“Our work does not end here – I will continue to ensure we collaborate across government, and with law enforcement and the private sector, to ensure everyone in the UK is better protected from fraud.”

The UK’s plan of action

Fraud accounts for around 40 per cent of all crime in England and Wales, with data from UK Finance showing almost 80 per cent of all authorised pushed payment fraud originates from social media or a fake website.

In fact, purchase scams starting on Facebook and Instagram could cost UK consumers over £27million in 2023, according to Lloyds Banking Group earlier this year.

The new Online Fraud Charter is also supported by an Action Plan, agreed by the Online Advertising Taskforce. The Action Plan sets out how the financial industry and UK government plan to increase protection for children – including developing a base of evidence, improving information sharing and promoting industry best practices.

John Whittingdale, Creative Industries Minister, explained: “Whether it’s fake celebrity endorsements or scam ads, we have a plan to shut down illegal online adverts putting people and their money at risk.

“Created in partnership with industry through the Online Advertising Taskforce, our Action Plan sets out steps the sector and government are taking to help keep people safe and toughen up protections for children.”

Time for ‘all signatories’ to act

The tech firms have also committed to running direct routes for law enforcement to report suspicious activity taking place on the services, making it easier to quickly identify and remove fraudulent content and protect users.

Paul Davis, director of fraud prevention at UK bank TSB, reacted to the news: “We’ve campaigned for years for tech companies to do far more to prevent the fraud that’s become rife on social media platforms.

“Now we have the Charter, it’s down to all signatories to match their commitment with meaningful concerted action – putting the right protections in place to reduce fraud and take responsibility to protect millions of consumers on their platforms.”

‘A huge step in the right direction’
Jake Moore, global cybersecurity advisor at ESET
Jake Moore, global cybersecurity advisor at ESET

Jake Moore, global cybersecurity advisor at cybersecurity software provider ESET, also explained his view that social media platforms could drastically reduce fraud with simple steps: “If these leading technology firms can work together in unison we could potentially see a huge shift towards the beginnings of combatting online fraud.

“Digital crimes are relatively simple to carry out but they are often made easier by social media companies and large technology platforms not wishing to commit more resources or have more protections in place.

“Verifying services, people and their claims is not a very difficult task to carry out but it could be enough to see a dramatic reduction in internet-based fraud.”

Oliver Prill, CEO, Tide
Oliver Prill, CEO of Tide

Oliver Prill, CEO of financial business platform Tide, says the Charter could be a sign of the start of positive action against fraudsters: “We are pleased to see the Online Fraud Charter will bring in measures that will cover detection and blocking of fraudulent material, quick routes to reporting fraud, taking immediate action against fraudulent content and users, dedicated liaisons who will respond to law enforcement requests and action that engages in quickly sharing information about fraud.

“We very much welcome the announcement of an Online Advertising Taskforce and the move to verify new advertisers. This is a huge step in the right direction, and we look forward to continuing to collaborate with the tech sector to prevent fraud happening, as well as bring better outcomes for victims.”

Can the charter ‘impose meaningful consequences for violations’?

However, not everyone is convinced that the new Charter will have the desired impact. Curtis Nash, founder and CEO of Paytia, the cloud-based payment platform, suggests that it could fall short due to a lack of enforcement: “While the Online Fraud Charter may appear promising at first glance, there are valid concerns regarding its effectiveness, particularly when it comes to holding large organisations accountable.

Curtis Nash, founder and CEO of Paytia
Curtis Nash, founder and CEO of Paytia

“It’s reminiscent of the situation with PCI-DSS compliance in the credit card industry, which aims to encourage businesses to safeguard sensitive customer data. However, after 24 years in existence, it’s questionable what tangible results it has produced.

“Many businesses are unfamiliar with its purpose and requirements, and its enforcement has been inconsistent. Without consistent penalties for non-compliance, there may be little motivation for organisations to prioritise adherence.

“Likewise, there is scepticism that the Online Fraud Charter, despite its lofty rhetoric, may suffer from similar shortcomings. Concerns revolve around whether it will be adequately enforced and whether it will impose meaningful consequences for violations. Without robust enforcement and punitive measures, it may end up being a low-priority item for most organisations, only garnering attention from their public relations departments.”

A ‘question mark’ remains over the charter
Mark Jones, partner at London law firm Payne Hicks Beach
Mark Jones, partner at London law firm Payne Hicks Beach

Mark Jones, partner at London law firm Payne Hicks Beach, also revealed his own concerns: “Tech companies have signed up to the government’s Online Fraud Charter with the aim of joining with law enforcement to protect the public from online scams.

“A great initiative, but given that the criminal justice system is already at breaking point coupled with a lack of resources to investigate and prosecute, there’s a question mark over whether this will actually result in more prosecutions and convictions.”

Whether the new Online Fraud Charter can significantly reduce fraud levels is yet to be seen. Although the first signs and big-name signatories show promising signs, it is clear much of the industry is wary of whether it can fulfil its aims.

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