Meta platforms are at the top of the list when it comes to payment scams in the UK, according to claims by UK Finance, a finance group representing over 300 companies. The group has written to the UK Chancellor, Jeremy Hunt, urging the government to hold tech companies responsible for payment fraud on their platforms. In particular, UK Finance is pointing the finger at Meta, alleging that it is connected to more than 60% of all push payment fraud.
Push payment fraud, also known as bank transfer fraud, is a type of scam where fraudsters deceive individuals or businesses into authorizing the transfer of funds from their bank accounts to accounts controlled by the criminals. This typically involves social engineering techniques to trick victims into believing they are making legitimate payments or transfers. Tactics used by scammers include brand impersonation, crypto deals that are too good to be true, online romances, overdue fines, or requests for money from relatives.
As victims initiate the payment themselves, most banks are reluctant to reimburse the funds. However, starting in 2024, UK banks will be required by the government to reimburse victims of fraud who have been tricked into sending money to fraudsters.
With these new rules on the horizon, it’s understandable that the UK finance industry is pressing for tech companies to take more responsibility for online financial crime.
According to a report from Outseer, APP scams now make up 75% of all online banking payments fraud. Additionally, UK Finance claims that criminals stole £485.2 million through APPs last year alone. While this number is down 17% from the previous year, there are concerns that advancements in generative AI could make fraudulent tactics online more sophisticated and turbo-charge scams.
In May of this year, the UK government announced a new national fraud strategy but stopped short of making tech companies compensate victims of online scams. However, large platforms now have a duty of care to protect users from fraud and other harmful content.
The data in the letter from UK Finance, as reported by the Financial Times, states that platforms owned by Meta, including Facebook, Facebook Marketplace, Instagram, and WhatsApp, are where 61% of all APP scams occur. A spokesperson for the company told the Financial Times that fraud is an industry-wide issue, with scammers constantly evolving their methods to defraud people in various ways. Meta claims to be working with law enforcement to support their investigations.
Under the UK’s fraud strategy, tech companies are required to make it easy for users to report fraud on their platforms with just a few simple clicks. Additionally, the government aims to highlight which platforms are the safest and ensure that companies are incentivized to combat fraud.
Depending on how the government implements these measures, Meta will likely face significant challenges. According to statistics from UK bank TSB, up to 80% of the three biggest fraud categories (purchase, impersonation, and investment fraud) occur on Meta’s platforms.
By addressing these concerns and taking appropriate action, tech companies can play a vital role in protecting their users from payment scams and online fraud.
