Liability for Scam Losses in Financial Transactions

This report addresses the issue of liability for scam losses in financial transactions, particularly focusing on the roles of banks, consumers, and big tech companies. It outlines the rising prevalence of scams, which have increased as banks enhance their fraud prevention measures. The report discusses the reluctance of banks to reimburse scam victims, as these transactions are often authorized by the consumers themselves. It highlights the lack of legal mandates requiring banks to assume full responsibility for such losses, which leaves consumers vulnerable. The report also examines the emerging 'polluter pays' model proposed by UK banks, which seeks to hold big tech accountable for their role in facilitating scams. This model could influence liability policies in other markets, including the US. Additionally, the report presents case studies of individuals who fell victim to scams, illustrating the real-world impact of these issues. Overall, it emphasizes the need for a comprehensive approach to scam liability that considers all parties involved.