Calls from UK financial institutions, like Revolut, continue to place more responsibility on social media companies to mitigate the rise in fraud circulating on their platforms.
This follows a recent report issued by Revolut, which detailed the evolving tactics fraudsters are now undertaking to exploit victims via messaging services.
The Revolut Consumer Security and Financial Crime Report revealed that 54% of all fraud cases reported to the UK digital bank have emanated from Meta-owned platforms, such as Facebook, Instagram and WhatsApp.
This is the third consecutive reporting period in which Meta has held the highest percentage of fraud cases according to the report, with Google accounting for just 0.09% in the most recent reporting period.
Facebook remains the platform where most fraud cases happen, at 28%, followed by WhatsApp with 21%. Revolut placed emphasis on encrypted messaging services like WhatsApp and Telegram, with the latter also accounting for 18% of all reported fraud cases.
Revolut Head of Financial Crime, Woody Malouf, stated: “Fraudsters are rapidly adapting their tactics, increasingly exploiting supposedly secure encrypted messaging apps like WhatsApp and Telegram.
“Yet, despite repeated calls from Revolut and other financial institutions, social media platforms are failing to address the fraud plaguing their users, and their inaction is not just negligent; it’s a direct enabler of financial crime. We need immediate, decisive action, not empty promises.”
With 39% of fraud cases originating from encrypted messaging services, Revolut has called on Meta and other social media platforms to verify and decrypt messages that are targeting vulnerable people from potential scams.
These encrypted messages can only be decrypted with authorised tools, making them unreadable for everyone other than the intended recipient. This often sees people fall victim to scams due to the secure nature of these messaging platforms, with many fraudsters pretending to be family members or friends to coerce people into sending them money.
This type of fraud is often called Authorised Push Payment (APP) fraud, and has been a major topic of discussion in the UK over recent months.
APP fraud a continuing problem
In 2023, APP fraud accounted for nearly £460m in losses according to a report from UK Finance. More than 230,000 APP fraud cases were reported by UK Finance, a 12% increase from reported fraud cases back in 2020.
Acknowledging the mounting issue APP fraud is causing, the Payments System Regulator (PSR) introduced new regulations last October designed to provide greater reimbursement clarity to victims.
The new PSR ruling states that victims will now be fully reimbursed, split 50/50 between the paying and receiving companies, capped at £85,000. While this new rule will have brought ease of mind to potential victims, the payments industry argued this may do little to solve the surge in APP fraud.
Many industry leaders spoke to Payment Expert last October once the new PSR regulation was implemented, arguing that fraudsters may exploit the £85,000 reimbursement cap for personal gain, while also highlighting there needs to be more responsibility placed upon social media platforms where they believe a majority of the APP fraud is happening.
After issuing its recent financial crime report, Revolut has stated that it is now calling on social media companies, like Meta, to take “decisive action” against APP fraud.
The UK fintech has suggested proactively removing scam content from platforms, verifying advertisers and committing to the share of APP fraud reimbursement for victims of scams that originate from their platforms.
“Revolut are demanding more than reactive measures; advocating for proactive intervention, including more stringent verification processes for advertisers and content creators, robust AI-driven monitoring, and seamless collaboration with financial institutions and law enforcement,” added Malouf.
“Additionally, Revolut continues to push for commitments from social media companies to share reimbursement for victims of scams originating on their platforms. The current status quo remains unacceptable.”
