Most of the scams reported to British financial app Revolut last year started on the meta platform's social media, with most funds lost to “get rich quick” investment schemes.
The London-based fintech company found that 60% of fraud cases in the UK come from Facebook, Instagram and WhatsApp, dwarfing scams carried out on other platforms and phones. Revolut found a similar trend across Europe, with 61% of fraud emanating from meta services.
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Woody Maloof, Revolut's head of financial crime, said the Meta platform was “being used as a breeding ground for fraud” and urged Revolut customers to avoid so-called investment opportunities. “Banks and financial institutions should not be the only line of defense, but the last line of defense,” he said.
This week, Maloof appeared alongside financial and technology executives before the UK Parliament's Home Affairs Committee, which is investigating the proliferation of authorized push payment scams. The Payment Systems Regulator said these scams tricked customers into transferring funds to accounts controlled by criminals, resulting in around £500m in losses in 2022.
Starting in October, payment companies that allow fraudulent payments to be sent or received will have to compensate victims unless they can prove they were grossly negligent.
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This rule change will particularly impact emerging small finance companies. PSR found that Monzo, Starling and Metro Bank Holdings Plc were among the companies with the highest rates of APP fraud, with more than 100 frauds per million transfers.
Meanwhile, tech companies signed a voluntary online fraud charter last year to stop more scams from reaching customers. Mr. Sterling and others complain that Meta is not doing enough to address the issue.
© 2024 Bloomberg
