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UK fintech Revolut has called on Meta to share the cost of compensating fraud victims with banks and criticised its fraud prevention efforts, in a sign of rising tension between financial and tech groups about how to tackle and pay for the problem.
The fintech on Thursday took aim at a UK initiative that Meta launched the day before to allow banks to share transaction data with the platform in a bid to prevent fraud.
“These plans are baby steps, when what the industry really needs is giant leaps forward,” said Revolut’s head of financial crime, Woody Malouf.
“These platforms share no responsibility in reimbursing victims, and so they have no incentive to do anything about it, he said, adding Meta’s latest solution “simply isn’t good enough”.
The criticism comes as the tech sector faces scrutiny over its role in enabling “authorised push payment” fraud, where victims are tricked into sending money to fraudsters from their bank accounts.
Britons lost £460mn to APP fraud last year, according to trade body UK Finance, 70 per cent of which involved goods that were ordered online by consumers but not received.
According to Revolut data, 69 per cent of scams that UK customers reported to the fintech in the first half of this year originated on Meta platforms — such as Facebook and Instagram — up from 67 per cent in the second half of last year.
From October 7, UK banks and payment companies will be liable for refunding fraud victims on claims worth up to £85,000. Bankers and politicians argue that making tech companies contribute to compensation costs would give them an incentive to do more to tackle fraud.
Before it was elected in July, the country’s ruling Labour party said that tech companies “contribute very little” to tackling online fraud or compensating victims, in a document seen by the Financial Times that sets out plans to make them contribute to compensation costs.
“What is urgently needed now is for Meta and other social media companies to commit to supporting victims of fraud in the same way financial institutions do,” said Malouf.
Meta’s global head of counter-fraud Nathaniel Gleicher told the Financial Times on Wednesday that the social media group had significant incentives to root out fraud, including creating a “safe” community for its users and complying with regulation.
Facebook and Instagram are signatories to the UK’s online fraud charter, a voluntary agreement drawn up last year between tech companies and the government to try to reduce fraud.
Social media companies must also take down fraudulent ads under the Online Safety Act. Media regulator Ofcom can fine those that fail to comply.
Meta said: “Fraud is a multi-sector spanning issue that can only be addressed by working collaboratively. Our pilot Fraud Intelligence Reciprocal Exchange programme (FIRE) is designed to enable banks to share information so we can work together to protect people using our respective services. We encourage banks including Revolut to join in this effort.”