HSBC has joined a growing number of banks calling for technology and social media companies to take more responsibility towards compensating victims of Authorised Push Payment (APP) fraud.

APP fraud losses in the UK surged to over $500 million in 2023, with new regulations coming into force in October requiring banks to refund most losses suffered as a result of APP fraud.

The Payment Systems Regulator (PSR) introduced these rules to boost protection for fraud victims and improve fraud prevention measures.

The regulations represent a significant change for the banking industry, as they make these refunds mandatory. Previously, banks could compensate clients on a voluntary basis.

With data from UK finance showing that 76% of APP fraud originates online and another 16% in the telecom sector, UK banks have long been pushing for big tech, social media and telecoms firms to shoulder more responsibility to collectively tackle the issue.

David Callington, HSBC’s UK head of fraud, is one of the latest senior executives campaigning for the change, asking for the broader environment to be held accountable.

He told the Guardian: "The wider ecosystem, and key players in the ecosystem, have to be held to account. They need the financial incentive.”

UK Finance, the British trade association for the UK banking and financial sector, has also been advocating for stronger regulations to combat APP fraud, urging the government to strengthen regulations for all sectors involved and make commitments such as signing for the UK Online Fraud Charter mandatory for tech companies.

The UK Online Fraud Charter is a voluntary agreement between the government and he technology sector, launched with the aim to tackle the issue of online fraud more effectively.

The charter currently includes commitments from major tech companies including Amazon, Google and Facebook.

Echoing the sentiment, Callington called for the extension of fraud accountability to other industries involved in the online space.

"What we would urge for is a shifting of some of those obligations into regulation, so there is an actual obligation on other sectors who are part of the ecosystem to take action and protect what are our common customers, our common users."

---