Revolut has issued a publicly criticised Meta, the parent company of Facebook, for its handling of fraud on its social media platforms. The UK-based financial technology firm has asserted that Meta should assume direct responsibility for compensating individuals who are victims of scams occurring through its services.
The British fintech’s financial crime head Woody Malouf has been reported by CNBC as stating that Meta’s actions to mitigate financial fraud are not adequate, suggesting that the industry requires more substantial progress. “These platforms share no responsibility in reimbursing victims,” said Malouf. As such, he argued, “they have no incentive to do anything about it. A commitment to data sharing, albeit needed, simply isn’t good enough.”
Revolut snipes at Meta following new bank fraud partnership announcement
This statement was made in the wake of Meta’s announcement of a partnership with UK banks NatWest Group and Metro Bank to develop a data-sharing framework aimed at preventing customers from becoming victims of fraud. In line with this, Meta expanded its Fraud Intelligence Reciprocal Exchange (FIRE) with both banks to facilitate new data exchanges. Revolut claims that this initiative is insufficient in addressing the global issue of fraud.
A spokesperson for Meta responded to the business news channel by stating that the intelligence-sharing framework for banks is designed to facilitate the sharing of information between banks to enhance user protection.
The spokesperson emphasised that fraud is an issue that spans multiple sectors and can only be effectively addressed through collaboration. Moreover, the spokesperson said that Meta is encouraging banks, including Revolut, to join the effort.
New reforms in the UK payment industry will come into effect next week, which will require banks and payment firms to provide victims of authorised push payment (APP) fraud with a maximum compensation of £85,000.
The UK’s Payments System Regulator had previously recommended a higher compensation limit of £415,000 for fraud victims but withdrew this recommendation following backlash from banks and payment firms.
Malouf also said that while Revolut supports the initiatives undertaken by the UK government to combat fraud, he believes that Meta and other social media platforms should contribute to financial compensation for those who fall victim to scams originating on their platforms.
New regime for compensating online fraud victims
This week, the UK government announced new measures granting banks additional powers to delay and investigate payments suspected of being fraudulent, aimed at better protecting consumers from scammers.
Under the proposed laws, banks will be allowed to delay payments by up to 72 hours if there are reasonable grounds to suspect fraud and more time is needed for investigation.
In the Consumer Security and Financial Crime Report released this week, Revolut claimed that 62% of user-reported fraud on its online banking platform originated from Meta, a decrease from 64% in the previous year. The report further identified Facebook as the primary source of scams reported by Revolut users, representing 39% of fraudulent activities, while WhatsApp accounted for 18%.
In August this year, Revolut reached a market capitalisation of $45bn after going through a secondary share sale. The valuation made the UK fintech more valuable than many of its more established competitors, including Barclays and Société Générale.
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