UK Regulator Proposes Tax on Social Media to Fight Cyber Fraud

The UK’s Payment Systems Regulator (PSR) has proposed introducing a tax on internet companies to help combat cyber fraud, according to the Financial Times. David Geale, a representative of the PSR, stated that social media platforms need to do more in the “war of attrition against financial fraudsters on their sites.” He also suggested that British ministers should consider requiring these platforms to compensate victims of online scams.

Geale’s comments come after the regulator mandated last week that banks must reimburse victims of fraud up to £85,000. He believes that implementing a tax on IT companies—forcing them to pay for the consequences of scams or to fund law enforcement efforts—would be a complex issue. However, he emphasized that this is “one of the options that should be considered by the government.”

Calls for Tech Giants to Take Responsibility

The CEO of Lloyds Banking Group has joined calls for tech companies like Meta to do more to stop the surge in fraud originating from social media platforms. Charlie Nunn noted that 80% of such crimes in the UK occur through major tech companies, with nearly 70% traced back to a single company—Meta (recognized as an “extremist organization” and banned in Russia).

Nunn’s comments followed the introduction of new rules requiring banks to compensate up to £85,000 per claim. He highlighted Meta’s role, as the owner of Facebook, WhatsApp, and Instagram, as a major source of fraud for which banks ultimately have to pay:

“They are the ones allowing fraudsters to contact customers and send them messages encouraging unsafe payments. That’s why we are really asking tech companies to work more closely with us to protect people.”

Meta’s Response and Cooperation with Banks

Previously, Meta announced it would expand its cooperation with more UK banks as part of its mutual fraud data-sharing initiative (FIRE), following a six-month trial with NatWest and Metro Bank.