Barclays Urges Tech Giants to Tackle Purchase Scams on Social Media

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Introduction: Rising Concerns Over Purchase Scams on Social Media

Barclays, a prominent UK bank, is sounding the alarm on the alarming rise of purchase scams originating from social media platforms, accounting for a staggering 88% of all such scams. In response, the bank is calling upon technology companies to take responsibility and reimburse victims who fall prey to these deceitful schemes, as these scams continue to plague consumers.

Source of Scams: Social Media’s Dominance in Purchase Scams

Purchase scams, where individuals are deceived into buying products that never materialize or fail to meet advertised specifications, have surged in recent times. On average, victims of these scams lose £1,000 (€1,173), constituting two-thirds of all reported scams. Shockingly, Barclays’ data reveals that nearly nine out of ten purchase scams originate from social media platforms. This alarming trend has prompted Barclays to assert that social media companies should play a role in compensating victims, thereby creating incentives for robust scam prevention measures.

Bank’s CEO Stresses Collaborative Action to Curb Scams

Matt Hammerstein, CEO of Barclays UK, emphasizes that the data underscores the prominent role of tech platforms, especially social media, in perpetrating scams. Despite this stark reality, there lacks a legal framework obligating the tech sector to actively combat scams. Hammerstein argues that combatting this “epidemic” necessitates concerted efforts from tech organizations, government bodies, and regulators. Without such collaboration, the growth of scams, now the most common form of crime in the UK, poses a significant threat to individuals and the economy.

Barclays’ Policy Recommendations for Scam Prevention

To combat the scourge of scams, Barclays is advocating for four critical policy changes:

  1. Establish a Coordination Group: Create a cross-government group to align regulators, policymakers, industry bodies, and companies across diverse sectors, thereby enhancing the collective response against scams.
  2. Mandate Scam Prevention Measures: Enforce mandatory scam prevention measures for tech companies, compelling them to proactively combat fraudulent activities on their platforms.
  3. Transparency in Data: Require companies to disclose their scam-related data, providing users with insights into the risks associated with using their platforms.
  4. Victim Reimbursement Fund: Introduce a victim reimbursement fund, financed by companies whose platforms are exploited for scams, including both tech corporations and financial institutions.

Demographics at Risk: Young Adults and Seniors

Barclays’ data highlights the vulnerability of various demographic segments. Young adults between the ages of 21 and 30 are the most susceptible to scams, constituting 24% of victims. On the other hand, individuals over the age of 70 suffer the most substantial financial losses, accounting for a quarter of all funds lost to scammers. This concerning trend underscores the need for comprehensive measures to safeguard consumers across age groups.

Conclusion: A Call for Collective Action Against Scams

Barclays’ fervent call for action underscores the urgent need for collaborative efforts between tech companies, government bodies, and regulatory authorities to combat the rising tide of purchase scams originating from social media platforms. By urging for policy changes that emphasize transparency, reimbursement, and mandatory prevention measures, Barclays seeks to create a safer digital landscape for all users. The battle against scams demands a united front, with a shared commitment to protecting individuals, preserving trust, and fortifying the economy against this pervasive threat.

SOURCE: Ref Image from Money Federal Credit Union

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