How can data-sharing help to spot scammers and prevent online fraud?

Fraud is the most common crime that’s committed in the UK, accounting for over 40% of all crime. The cost is huge. Last year HMT said that fraud cost UK consumers a staggering £8.3 billion and steals money away from investment and lending by the financial services sector.  While the Global Anti-Scam Alliance (GASA) in association with Cifas revealed that the UK lost £11.4 billion to scams in the 12 months up to November 2024.

The development of an ambitious and innovative new fraud strategy presents a pivotal opportunity to establish a comprehensive plan to tackle fraud at source, reduce societal harms, and support economic growth. We have a wealth of experience as the UK’s largest digital bank, with 28 million customers, and having invested more than £100 million in fraud prevention in the past three years alone. We believe, and recommend, that targeted government action to enhance anti-fraud initiatives including secure data sharing between technology and telecommunication companies (tech and telcos) and banks will help to materially reduce fraud and protect consumers.

The fight against fraud has long been placed on the shoulders of banks. We’ve made significant headway through enhanced detection tools, customer education during payment journeys and payment interventions to alert customers to the potential they are being scammed. But sadly, we aren’t in a position to stop fraud from happening at the source. 

To do that, we need to work closely with the platforms and telcos where these scams are initiated. If data on bad actors is shared across these sectors the information can be used to better protect consumers. For example, tech companies removing fake adverts and links, or banks using additional information to detect more fraudulent payments and block more fraudsters from setting up accounts to receive stolen funds.

At the moment, over two-thirds (68%) of all purchase scams start on just two Meta-owned social media platforms: Facebook (including Facebook Marketplace) and Instagram2. The evidence is clear that fraudsters continue to exploit online platforms and telco networks to access and coerce victims.

Despite this, banks have been at the forefront of efforts to stop scams, and while mandatory reimbursement ensures that many people who fall foul of a scam will have their finances protected, the prevalence of scams on these platforms leaves people out of pocket. Reimbursement also does not help with the emotional impact that many experience after they have been scammed or prevent criminal gangs from stealing money which can be used to fund further serious organised crime and undermine our national security.

The frequency of fraud on these platforms can also have an impact on these companies’ reputations. In a recent survey, we found that 36% of victims have become less trusting of online platforms. 

Using data to tackle online fraud

In order to keep people safe from online fraud a comprehensive, joined-up approach across all sectors in the fraud ecosystem is needed, so that together we can tackle the issue of fraud. Establishing real-time and reciprocal data sharing between the public sector, tech, telco and financial services firms is essential to preventing scams, protecting consumers and disrupting criminal networks. 

For example, if tech companies shared phone numbers or email addresses associated with social media profiles involved in fraudulent activity, banks could match these with accounts to then proactively detect money mules and implement restrictions. 

To make a systemic difference in fraud prevention, all sectors must continue collaborating towards a solution where we can share data with each other in an effective, timely and secure way.

However, one of the key barriers to progress has been a perception that sharing data which could potentially indicate fraud would breach data protection and privacy laws. Therefore, a policy statement from government which outlines a clear expectation for firms to share and act on potential fraud indicator data could help to encourage greater data sharing.

Clear direction would help to remove uncertainty and unlock greater collaboration between sectors. This will help to alleviate any legal, competition, intellectual property, data privacy or cost concerns businesses may have with participation to ensure all businesses within the fraud ecosystem have the confidence to share data reciprocally and have quality information to assist them with tackling scams.

Public and private sector have a joint primary role to coordinate and facilitate data and intelligence sharing across sectors. Regulators must also work in partnership with financial services and other sectors to reduce the risk of possible conflicting regulatory requirements. 

What's the need for cross sector data sharing to help prevent fraud? 

As the UK’s largest retail bank with more than 28 million customers, we touch nearly every household and community in the UK. This gives us a unique insight into the devastating impact fraud has on our customers and wider society. 

For those who have fallen victim to a scam, the emotional aftermath can sometimes lead to severe psychological distress. Our research shows that, even after five years, many victims still report feeling powerless, a loss of trust, and less confident to spend, particularly online. 

This is why we continue to invest significantly in our fraud controls, with more than £100 million committed in the last three years alone to protect our customers from falling victim to this crime. But as we’ve already said, we can’t tackle the problem alone.

Sharing data across public and private sectors that could indicate a potential fraud or bad actor will enhance these controls, giving us an end-to-end view and enabling a joined-up approach to protecting UK consumers from scams. For this to be most effective, the sharing of data must be reciprocal, and each recipient should commit to use and act on it to clamp down on fraudsters.

What are the consequences if we don’t work together to stop fraud at the source?

The scale of fraud originating on online platforms and telco networks continues to pose a significant risk to the wider growth, prosperity and security of the UK. It’s clear that more must be done to protect users from fraud in order to preserve trust in online spaces, telco networks and to ensure a resilient economy.

With fraud costing the UK economy over £8 billion, this volume and severity of fraud undermines our economic and national security by directly funding serious organised crime, damaging UK investment, and causing societal harm for those falling victim.