UPDATE 1-Surge in UK fraud a national security threat, warn banks

* UK bank customers lose $1 bln to fraudsters in 6 months
-report

* Lenders call for government, tech firms action

* Google, Facebook bosses criticised by UK lawmakers
(Adds tech companies' comments to UK lawmakers)

By Iain Withers

LONDON, Sept 22 (Reuters) - A surge in fraud attacks on
consumers since the pandemic has become a 'national security
threat' for Britain, requiring government-coordinated action
across industries, banking lobby group UK Finance has warned.

Financial fraud has rocketed during the pandemic as more
consumers shop online and try digital banking and investing.

The UK Finance warning came as British lawmakers on
Wednesday criticised bosses at Facebook, Alphabet Inc's
Google, Amazon and eBay for not
doing enough to prevent the spate of online scams.

Criminals stole 754 million pounds ($1.03 billion) through
bank frauds in the first half of this year, up 30% on the same
period in 2020, the lobby group said in a report.

Bank losses from authorised push payment (APP) fraud - where
a customer is tricked into a payment by a criminal - also leapt
71% in the first half, overtaking the amount stolen through card
fraud for the first time, UK Finance said.

Lenders have been pushing for tougher action on fraud by the
government, regulators and other industries including online
platforms exploited by fraudsters to target victims, as they
grapple with a wave of increasingly sophisticated attacks.

The report found 70% of APP scams originated on an online
platform and also found an increase in online adverts targeting
people as young as 14 to become "money mules" for illicit funds.

UK Finance called for government-coordinated action across
sectors and for all economic crime to be covered by a planned
Online Safety Bill, which currently excludes online
advertisements.

"The level of fraud in the UK is such that it is now a
national security threat," Katy Worobec, managing director for
economic crime at UK Finance said in the report. "The banking
sector cannot solve this on its own."

'MAKING A MOCKERY'

Lawmakers on Britain's Treasury Select Committee told tech
company bosses during a hearing on economic crime that the
problem had got out of hand, accusing them of enabling fraud.

"Google's made a mockery of the regulator of this country,
by expecting the regulator to take down fraudulent stuff on the
site, and have to pay for it," lawmaker Rushanara Ali said.

Google has offered the Financial Conduct Authority (FCA),
Britain's regulator, $1.5 million in advertising credits to help
cover the cost of fraud awareness campaigns.

"We want them to take up those ad credits," Amanda Storey,
Google's director of trust and safety for Europe, the Middle
East and Africa, said. The tech firm intends to offer $3.5
million of advertisement credits to other scam awareness
campaigns.

Google has prohibited investment ads that are not
FCA-authorised - including for gold and cryptocurrencies - since
Sept. 6 this year, Storey added.

The tech firms said they were investing in fraud prevention
and collaborating with the government and regulators.

"We're actually the first line of defence, rather than an
enabler," Gaon Hart, head of public policy for customer trust at
Amazon UK & Ireland said.

Neither Google nor Facebook were able to say if they had
ever compensated customers for losses from fraud, though Amazon
said it had.
($1 = 0.7328 pounds)
(Reporting by Iain Withers; Editing by Emelia Sithole-Matarise)