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The banking and finance lobby group in the UK asserts that over half of digital payment scams in Britain originate from the social media sites owned by Meta, the parent company of Facebook.
UK Finance, representing more than 300 financial companies, has written a letter to the Chancellor Jeremy Hunt, providing data on the sources of payments fraud in the UK categorized by value and volume, as reported by two reliable sources.
The letter reveals that 61 percent of all reported authorized push payment fraud in terms of volume is connected to Meta, the company that owns Facebook, Facebook Marketplace, Instagram, and WhatsApp, according to the sources.
UK Finance’s move is part of a renewed effort by the industry to urge the government to hold tech giants more accountable for the rise in financial crime. While a national fraud strategy was announced by UK ministers in May, a previous proposal to make tech companies compensate victims was dropped.
Authorized push payment fraud involves fraudulent individuals deceiving people into transferring money from their bank accounts. This type of fraud surged during the pandemic when many people relied on digital services.
According to UK Finance, a total of £485 million was stolen through authorized push payment fraud last year. The scams include text messages impersonating relatives and demands for payment of fines or overdue taxes.
This letter adds to the growing tension surrounding the responsibility of compensating fraud victims.
While banks have voluntarily agreed to improve refund rates for victims of authorized push payment fraud, the rates differ significantly. UK Finance has called for the tech industry to assume more responsibility, given that online platforms are responsible for the majority of payment fraud cases.
Julian David, the CEO of trade association TechUK, stated that they are actively collaborating with the government and UK Finance to combat online fraud. He added, “Tech companies will take substantial action to combat fraud as outlined in the recent UK fraud strategy, and we are working quickly with the financial services sector and the government to address authorized push payment fraud.”
The national fraud strategy aims to coordinate efforts between the government, private sector, and law enforcement. However, the plans were weakened in favor of a voluntary “online fraud charter.”
Several tech companies, including Meta and Microsoft, have strengthened their advertising policies to require approval from the Financial Conduct Authority for UK financial services companies looking to advertise on their platforms.
Tech companies are also actively scanning images, blocking IP addresses of fraudsters, and utilizing machine learning to detect fraudulent activities.
Recent figures indicate that the 10 banks participating in the fraud compensation scheme experienced a decrease in complaints reported to regulators last year. Conversely, lenders not part of the scheme reported a 38 percent increase in complaints.
UK Finance declined to provide a comment.
A spokesperson from Meta stated that this issue is prevalent across the industry, with scammers employing increasingly sophisticated methods, including email, SMS, and offline approaches, to defraud individuals in various ways. The company emphasized its efforts to block scams, restrict financial services advertisers to FCA-authorized entities, and conduct consumer awareness campaigns on identifying fraudulent behavior.
Meta also highlighted that users can easily report such content, and the company is collaborating with the police to support investigations.
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