As the UK grapples with an escalating fraud epidemic, Tide, the influential business banking platform – which serves over half a million small and medium-sized enterprises (SMEs) – is urging the government to implement a novel measure: an anti-fraud tax.
Addressing the UK Fraud Epidemic
Tide’s call comes on the heels of the government’s recent unveiling of a new Fraud Strategy. The strategy is marked by the formation of a National Fraud Squad, bolstered by 400 fresh investigators.
Yet Tide argues that this falls significantly short of the resources required to effectively tackle the 2.7 million scams plaguing the British public annually.
In the first half of 2022 alone, scammers fleeced the public of an alarming £610m, as reported by UK Finance, a representative body for banking and financial services.
The Anti-Fraud Tax Proposal
A significant portion of scams involve Approved Authorised Payment (APP) Fraud, where unsuspecting victims are deceived into transferring money to fraudsters.
In response, Tide advocates for an anti-fraud tax imposed on the value chain to bolster the capacity of law enforcement.
The proposed tax would target social media and telecoms companies — the breeding grounds for a majority of scams — as well as faster payment transactions.
Revenue from this levy would not only fund law enforcement agencies but also compel them to vigorously pursue and prosecute scammers, including those operating from foreign soil, under a stringent zero-tolerance policy.
Commentary from Tide’s CEO
Oliver Prill, Tide’s CEO, expressed his concern about the pervasive impact of fraud.
He remarked: “Fraud causes enormous harm and puts stress on small businesses, consumers and financial institutions – and in the process, this damages the UK’s economy.
“The target to cut fraud by only 10% by the end of 2024 with another 400 police officers is nowhere near enough to combat the sheer scale of the problem and the damage done.
“This is why we are calling for a tax to fund action against what has become a terrible blight on the UK.
Prill also highlighted the urgent need for a more ambitious approach from the government. He said: “While a step in the right direction, the government’s new fraud strategy needs to be bolder and more ambitious.
“Fraud pays in the UK and is attracting fraudsters from around the globe. Instead of guaranteeing returns to fraudsters through mandatory reimbursement, such money, alongside an anti-fraud tax, should be invested in fraud prevention and prosecution.
“We believe that our policy recommendations can help turn the tide on fraud.”
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