Fintech calls for anti-fraud tax to tackle fraud epidemic

Tide has argued that the government should introduce an anti-fraud tax to fund the fight against fraud, as the fintech firm criticized the lack of ambition in its recently released fraud strategy.

Although Tide – which offers mobile banking services for SMEs – welcomed the creation of a National Fraud Squad, it claimed it was nowhere near enough to tackle “the UK’s fraud epidemic”.

“The target of cutting fraud by just 10 per cent by the end of 2024 with an additional 400 police officers is nowhere near enough to combat the scale of the problem and the damage done,” said Tide chief executive Oliver Prill.

According to data from UK Finance, over £1.2 billion was stolen by fraudsters in 2022, making the UK the “fraud capital of the world”.

Tax against fraud

To bolster defenses against fraud, Tide argued there should be an anti-fraud tax that could help fund and train more police officers.

The tax will be imposed across the value chain, including on social media and telecoms companies and every faster payment transaction in the UK, where most fraud starts. Data from the UK Treasury shows that almost 80 per cent of authorized push payment fraud comes online.

Alongside the anti-fraud tax, Tide proposed that the police be forced to investigate and prosecute fraudsters.

Tide also argued that plans to force financial institutions to reimburse victims of fraud should be reconsidered.

“Instead of guaranteeing returns to fraudsters through mandatory refunds, such money, along with an anti-fraud tax, should be invested in fraud prevention and prosecution,” Prill said.

Debates surrounding refunds have been a controversial aspect of the government’s fraud strategy.

Plans to force big tech companies to reimburse victims of fraud were watered down in the final policy, drawing criticism from many in the financial sector who feel tech companies need to be encouraged to clean up their websites.

A Home Office spokesperson said: “This Government is absolutely committed to cracking down on fraud and we continue to work intensively with partners across government, law enforcement and industry to protect the public from fraud.

“The fraud strategy sets out how we will block fraud at source, bring offenders to justice, shut down fraudulent infrastructure and ensure the public get the advice and support they need,” the spokesperson continued.