Meta singled out by UK financial lobby group over digital scams

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A UK banking and finance lobby group is claiming that Facebook-owned Meta’s social media sites are responsible for more than half of UK digital payment scams.

UK Finance, which represents more than 300 financial companies, has written to Chancellor Jeremy Hunt with data on sources of payment fraud in Britain by value and volume, according to two people familiar with the situation.

The people said in the letter that 61 percent of all authorized push payment fraud reported by volume was linked to Meta, which owns social media sites Facebook, Facebook Marketplace, Instagram and WhatsApp, the people said.

The move by UK Finance is a fresh attempt by the industry to persuade ministers to force tech giants to take more responsibility for the rise in financial crime. UK ministers announced a national fraud strategy in May but abandoned a previous proposal to provide compensation to tech companies.

Authorized push payment fraud is a scam where fraudsters trick people into transferring funds from their bank account. This type of fraud increased during the pandemic at a time when many people were relying on digital services.

According to UK Finance, around £485 million was stolen through authorized push payment fraud last year. These scams include messages claiming to be relatives asking for money, and demanding that the victim pay fines or pay overdue taxes.

The letter comes amid growing tension over which companies are responsible for compensating victims of fraud.

There is a voluntary agreement between banks to improve the amount returned to victims of authorized push payment fraud, although rates vary widely. But UK Finance has called for greater responsibility from the tech industry, noting that online sites are responsible for most payment fraud.

Julian David, chief executive of trade association TechUK, said it was “working closely with the government and UK Finance to tackle online fraud”.

“Tech companies will continue to take further significant action to reduce fraud as set out in the recent UK Fraud Strategy and we are currently working with government and financial institutions to address the issue of authorized push payment fraud. Working closely with the service sector.” ,

The National Fraud Strategy aims to co-ordinate the approach of government, the private sector and law enforcement. But the plans were scrapped in favor of a voluntary “Online Fraud Charter”.

Several technology companies, including Meta and Microsoft, have tightened their approach to advertising so that UK financial services companies wishing to advertise with them must be approved by the Financial Conduct Authority.

Tech companies are already scanning images and blocking the IP addresses of fraudsters, using machine learning to detect fraudulent behavior.

Recent data shows that the 10 banks that signed up to the fraud compensation scheme have seen a drop in complaints with regulators over the past year. However, lenders who chose not to join the resolution plan reported a 38 per cent increase in complaints.

UK Finance declined to comment.

A Meta spokesperson said this is an industry-wide issue, with scammers using increasingly sophisticated methods to defraud people in a range of ways – including via email and SMS as well as offline.

“We don’t want anyone to fall victim to these criminals, which is why we have systems in place to prevent scams across our platforms, financial services advertisers now have to be FCA-authorised and we run consumer awareness campaigns to spot fraudulent behaviour. let’s run.”

Meta said people can report this content with a few simple clicks and the company is working with police to assist with their investigations.