UK-based fintech firm Revolut has criticised Facebook-parent Meta for its approach to prevent fraud on its social media platforms. The company has suggested that the social media giant should directly compensate users who fall victim to scams on its platforms like Facebook and Instagram. This criticism comes in response to Meta’s recent announcement of a data-sharing partnership with UK banks NatWest and Metro Bank which is aimed at preventing fraud.Revolut dismissed this initiative as insufficient, stating it “falls woefully short of what’s required to tackle fraud globally.” Revolut believes that Meta needs to take greater responsibility for the scams that take place on its platforms and provide financial restitution to those affected.
Starting October 7, new regulations in the UK will require banks and payment firms to compensate victims of authorised push payment (APP) fraud up to 85,000 GBP (nearly US$111,000). This type of fraud occurs when scammers trick individuals into authorising payments to accounts controlled by criminals.
This call for greater accountability from social media companies comes after the UK’s Payments System Regulator lowered the maximum compensation amount from a proposed 415,000 GBP (nearly US$ 545,000) following pushback from the financial industry.
What Revolut said about Meta’s fraud prevention policy
In a statement to CNBC, Revolut’s head of financial crime, Woody Malouf, criticised Meta’s plans to tackle financial fraud on its platforms. Malouf said that the social media company’s fraud prevention policies amount to “baby steps when what the industry really needs is giant leaps forward.”
“These platforms share no responsibility in reimbursing victims, and so they have no incentive to do anything about it. A commitment to data sharing, albeit needed, simply isn’t good enough,” he added.
A recent report by Revolut also highlights the significant role Meta’s platforms play in online fraud. The fintech firm found that 62% of user-reported fraud on its platform originated from Meta’s properties, including Facebook and WhatsApp.
Specifically, Facebook was identified as the source of 39% of reported scams, while WhatsApp accounted for 18%. While the percentage of Meta-originated fraud has slightly decreased from 64% last year, it remains a significant concern.
What Meta said about its framework for banks
In an email statement to CNBC, a Meta spokesperson said that its intelligence-sharing framework for banks “is designed to enable banks to share information so we can work together to protect people using our respective services.”
“Fraud is a multi-sector spanning issue that can only be addressed by working collaboratively. We encourage banks including Revolut to join in this effort,” the email added.
