TSB says Meta should take five steps to protect consumers, including issuing a commitment to investigating and removing fraudulent content within 24 hours.
UK bank TSB has written to Meta – the parent company of these social media platforms Facebook, Instagram, and WhatsApp – calling on the company to take immediate action to combat the “spiralling levels of fraud” on its platforms.
Last year, TSB recorded over 70,000 cases of purchase fraud on Facebook Marketplace, averaging nearly 200 incidents per day. The bank says scams originating from Meta’s platforms account for 80 percent of the fraud losses it refunds within its largest fraud categories: impersonation, purchase, and investment.
TSB has previously called on Meta to share the responsibility for compensating victims who have been scammed on Facebook, WhatsApp, or Instagram.
The bank projects fraudulent activities on the platforms will cost victims GBP 250 million (USD 320 million) this year, primarily through push payment fraud, and urges Meta to provide better protection for users.
“Meta needs to face up to its responsibility: it has a duty of care to the millions of customers who use its platforms, which is all the more important when we see innocent people lose life-changing sums every day,” said Paul Davis, TSB’s director of fraud prevention. “We have written to Meta demanding it puts in place the tech interventions urgently required to stem the tide of fraud and protect the many consumers who put faith in its services.”
TSB has outlined five key steps it believes Meta should take to protect consumers:
- Introduce a secure payment method on Facebook Marketplace
- Prohibit unregulated firms in the UK from advertising investments and financial products, including cryptocurrencies, on Facebook and Instagram
- Issue a public commitment to investigating and removing fraudulent content within 24 hours
- Filter and block adverts and posts that are “obviously fraudulent”, such as those using terms like “cash flip” or “crypto offer”
- Alert WhatsApp users when they receive messages from new numbers and advise them to check that the numbers are genuine
A Meta spokesperson said the issue extends across the industry and highlighted scammers’ use of “increasingly sophisticated methods” through email, SMS, and offline channels.
The spokesperson pointed to Meta’s existing systems to block scams, the requirement for financial services advertisers to be authorised by the FCA (Financial Conduct Authority) to target UK users, and ongoing consumer awareness campaigns to detect fraudulent behaviour. The spokesperson added that users are able to report suspicious content, and that Meta collaborates with law enforcement to support investigations.
Separate research from Lloyds Banking Group has found that over two-thirds of online shopping scams impacting UK consumers originated from Facebook and Instagram, describing social media as a “wild west” for fraud. The bank estimates that purchase scams will cost UK consumers more than GBP 27 million this year.
Lloyds called for technology and telecommunication companies to do more to “stop scams at source” and play their part in refunding victims of fraud which originates on their platforms.
UK Finance, an industry body representing the banking sector, has also called for social media companies to reimburse victims of online fraud, accusing them of “profiting” from scams on their platforms.
The UK PSR (Payment Systems Regulator) has recently announced a decision to make it mandatory for banks, building societies and payment firms to reimburse customers for authorised push payment fraud within the Faster Payments system by 2024.
Discussions surrounding fraud, liability sharing models, and regulation of technology firms and financial institutions are continuing to escalate, including in Asia Pacific. To hear more on this topic, register to attend Fraud and Financial Crime Asia 2023, which will be held in person in Singapore on 13 July.
For inquiries and registration, please visit https://www.financialcrimeasia.com/