The UK banking sector, consumer groups, and MPs are putting pressure on social media giant Meta due to its failure to prevent a surge of fraud on platforms such as Facebook, Instagram, and WhatsApp. The Guardian conducted an investigation revealing the personal stories behind scams originating on Meta’s platforms, with a prediction that these fraud cases will cost UK households £250 million in 2023. The investigation found that someone in the UK falls victim to a purchase scam on Facebook or Instagram roughly every seven minutes. The report also highlights the experiences of victims of the WhatsApp “Hi Mum” impersonation scam, where fraudsters pretend to be family members to trick people into sending money.
In response to the growing concern, TSB estimates that scams originating from Meta platforms could lead to £250 million in losses for UK households. The bank observed significant spikes in fraud cases related to Meta-owned sites and apps in 2022, accounting for 80% of the cases it dealt with. Many victims have found it difficult to report scams to Meta, receiving either automated responses or no response at all. Lucy Powell, the shadow digital, culture, media, and sport secretary, criticized social media bosses for evading responsibility for too long, urging them to prioritize consumer protection.
The online safety bill, currently under review in parliament, aims to compel tech and social media platforms to remove scam advertisements. The government’s anti-fraud measures include requesting tech companies to facilitate easier reporting of fraud and giving banks the ability to delay suspicious payments. However, there are currently no provisions for tech platforms to compensate customers for scams.
TSB, Barclays, Nationwide, and Starling Bank argue that Meta, with its $700 billion valuation, should contribute financially to cover the refund costs faced by banks. Meta generates substantial revenue from advertising, with Facebook’s UK operations alone reporting a 37% increase in gross income from advertisers in 2022, totaling £3.3 billion.
Barclays UK CEO Matt Hammerstein stated that the UK is facing an epidemic of scams, with 77% of them taking place on tech platforms, including social media sites. If tech companies refuse to act voluntarily and quickly, Hammerstein suggests that they should bear financial responsibility based on a “polluter pays” principle.
Starling Bank has withdrawn all paid advertisements from Meta platforms since December 2021 to protest its failure to address the scam issue. The consumer group Which? has also conducted research revealing misleading and potentially fraudulent investment advertisements on Facebook and Instagram. It urges Meta and other social media companies to take responsibility for combating scams.
To effectively combat fraud, Which? believes that the online safety bill must provide robust consumer protections and be promptly enacted. This would enable Ofcom to issue fines against social media companies that fail to prevent fraudsters from targeting innocent individuals through their platforms. Additionally, banks should not be exempt from reimbursing fraud victims, as they often facilitate scams by transferring funds to fraudsters and subsequently refuse to reimburse victims. The Financial Services and Markets Bill aims to require banks and payment providers to reimburse the majority of fraud victims and should become law as soon as possible.
Meta responded by stating that fraud is a widespread issue that scammers continually adapt to with increasingly sophisticated methods. The company claims to have systems in place to block scams on its platforms, enforces authorization for financial services advertisers, and conducts consumer awareness campaigns to educate users on detecting fraudulent behavior.
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