UK fintech Revolut has criticized Meta‘s fraud prevention efforts and called for the tech giant to share the cost of compensating fraud victims with banks. Revolut’s head of financial crime, Woody Malouf, stated that Meta’s recent solution is not sufficient and that these platforms have no incentive to take action since they do not bear responsibility for reimbursing victims. This criticism comes as the tech sector faces scrutiny over its role in enabling authorized push payment (APP) fraud, which involves tricking victims into sending money to fraudsters from their bank accounts. According to UK Finance, Britons lost £460mn to APP fraud last year, with 70% of cases involving online orders that were never received. Revolut data shows that 69% of scams reported by UK customers in the first half of this year originated on Meta platforms like facebook and Instagram.
Starting from October 7th, UK banks and payment companies will be responsible for refunding fraud victims on claims up to £85,000. Bankers and politicians argue that making tech companies contribute to compensation costs would incentivize them to do more in tackling fraud. The ruling Labour party also plans to make tech companies contribute more towards compensation costs as they believe these companies currently contribute very little towards combating online fraud or compensating victims.
Revolut’s Malouf emphasized the need for Meta and other social media companies to commit themselves to supporting fraud victims similar to financial institutions. In response, Meta’s global head of counter-fraud Nathaniel Gleicher highlighted the company’s incentives in rooting out fraud such as creating a safe community for users and complying with regulations.
facebook and Instagram are signatories of the UK’s online fraud charter—a voluntary agreement between tech firms and the government aimed at reducing fraudulent activities online. Additionally, social media companies are required under the Online Safety Act to remove fraudulent ads or face fines imposed by media regulator Ofcom.
Meta stated that addressing fraud requires collaborative efforts across multiple sectors. Their pilot program called Fraud Intelligence Reciprocal Exchange (FIRE) aims at facilitating information sharing among banks so they can work together in protecting users across their respective services. They encourage banks like Revolut to join this initiative.
