Meta Platforms are ‘hotbed’ for financial scams, Revolut says

Most scams reported to finance app Revolut in the UK last year started their journey on Meta Platforms social media, with most money lost to “get-rich-quick” investment schemes.

The London-based fintech found 60% of UK scam cases came from Facebook, Instagram and WhatsApp, dwarfing other platforms and frauds conducted by telephone. Revolut found a similar trend across Europe, where 61% of scams originated on Meta services.

Woody Malouf, Revolut’s head of financial crime, said Meta platforms were “being used as a hotbed for scams,” and urged Revolut customers to avoid so-called investment opportunities. “Banks and financial institutions should be the last line of defence, not the only line of defence.”

Malouf appeared alongside finance and technology executives this week at the UK’s home affairs committee in parliament, which is scrutinizing the surge in authorized push payment fraud. These scams trick customers into moving their money to accounts controlled by criminals and were responsible for almost £500 million in losses in 2022, according to the Payment Systems Regulator.

Starting in October, payment firms that allow fraudulent payments to be sent and received must reimburse victims, unless they can show they were grossly negligent.

The rule change will affect newer, smaller finance companies in particular. The PSR found Monzo, Starling and Metro Bank Holdings Plc were among firms with the greatest proportion of APP fraud, with over 100 frauds per million transfers sent.

Tech companies, meanwhile, signed a voluntary online fraud charter last year to try and block more scams from reaching customers. Starling and others have complained that Meta isn’t doing enough about the problem.

© 2024 Bloomberg