There has been debate brewing these past few months over who should be held responsible for reimbursing the victims of fraud.
For a while, the conversation was largely between the UK’s largest fintech – Revolut – and the world’s largest social media company – Meta.
Revolut has published some strong words on what they see as a moral failure from Meta, with equally strong statistics to match. According to the digital bank, Facebook alone was the original point of contact for 45% of UK scam cases in the first half of last year.
And Meta platforms at large supposedly were the source of 58% of scams throughout the entire year.
“Social media platforms not only continue to enable fraud, but…the issue is just as bad today as it was last year,” said Revolut’s head of financial crime Woody Malouf. “Their silence on this issue says it all.”
Revolut may only be looking out for number one by demanding social media companies share the financial burden of fraud, but the figures do suggest that these platforms are the lifeblood of the modern scam.
If payments firms are responsible for reimbursing victims because they facilitate the movement of funds, is it so crazy that the social media platforms that facilitate the conning of victims share the liability?
Revolut’s cause was bolstered last week when Innovate Finance echoed the demand for shared liability – extending the recommendation to include telco providers as well – in its anti-fraud strategy.
I spoke to a number of prominent figures in the payments industry after Innovate Finance’s report. From high street banks to challengers to straight up fintechs, a consensus appears to be forming that at the very least, greater collaboration between finance and social media is required to protect consumers.
But will the social media companies agree with this consensus? Probably not. It’s hard to imagine Meta announcing of its own volition that it will be reimbursing fraud victims that were scammed over WhatsApp, Instagram, Facebook or – if anyone uses it – Threads.
It will be up to the legislators and regulators to make that happen, but I wouldn’t expect that move to come soon. Social media is already facing a war with British regulator Ofcom over the Online Safety Act and fanning the flames any further would likely hurt the growth agenda in Labour’s Plan for Change.
The post Who should pay for fraud? appeared first on UKTN.
