Revolut CEO, Nikolay Storonsky (L) and Meta CEO, Mark Zuckerberg.
Reuters
British financial technology firm Revolut on Thursday criticized Facebook parent company Meta over its approach to tackling fraud, saying the U.S. tech giant should directly compensate people who fall victim to scams via its social media platforms.
A day after Meta announced a partnership with U.K. banks NatWest and Metro Bank on a data-sharing framework designed to help prevent customers from falling prey to fraud schemes, Revolut said the pact “falls woefully short of what’s required to tackle fraud globally.”
In a statement, Woody Malouf, Revolut’s head of financial crime, said that Meta’s plans to tackle financial fraud on its platforms amount to “baby steps, when what the industry really needs is giant leaps forward.”
“These platforms share no responsibility in reimbursing victims, and so they have no incentive to do anything about it. A commitment to data sharing, albeit needed, simply isn’t good enough,” Malouf added.
A Meta spokesperson told CNBC that its intelligence-sharing framework for banks “is designed to enable banks to share information so we can work together to protect people using our respective services.”
“Fraud is a multi-sector spanning issue that can only be addressed by working collaboratively,” the spokesperson said via email. “We encourage banks including Revolut to join in this effort.”
New payment industry reforms will come into force in the U.K. on Oct. 7 that require banks and payment firms to issue victims of so-called authorized push payment (APP) fraud a maximum compensation of £85,000 ($111,000).
Britain’s Payments System Regulator had previously recommended a £415,000 maximum compensation amount for fraud victims, but backed down following backlash from banks and payment firms.
Revolut’s Malouf said that, while his company is on board with steps the U.K. government is taking to combat fraud, Meta and other social media platforms should do their part to financially compensate those who fall victim to fraud as a result of scams originating on their sites.
The fintech firm published a report Thursday alleging that 62% of user-reported fraud on its online banking platform originated from Meta, down from 64% last year.
Facebook was the most common source of all scams reported by Revolut users, accounting for 39% of fraud, while WhatsApp was the second-highest source of such events with an 18% share, the bank said in its “Consumer Security and Financial Crime Report.”
Conclusion
In conclusion, the debate over financial fraud prevention and compensation continues to heat up between companies like Revolut and Meta. While Meta’s partnership with U.K. banks aims to improve data-sharing and prevent fraud schemes, Revolut believes that more direct compensation for victims is necessary to truly combat fraud globally.
As new payment industry reforms come into force in the U.K., the issue of compensation for fraud victims remains a hot topic. Revolut’s call for social media platforms like Meta to take more responsibility in compensating victims of scams originating on their platforms highlights the ongoing challenges in the fight against financial fraud.
With the release of Revolut’s report on fraud statistics, it’s clear that platforms like Facebook and WhatsApp continue to be common sources of scams affecting users. The need for collaborative efforts between financial institutions, fintech firms, and social media platforms to address fraud is more important than ever.
As the industry evolves and new technologies emerge, the conversation around fraud prevention and victim compensation will undoubtedly continue to evolve. Companies like Revolut are pushing for greater accountability and direct compensation, while others stress the importance of collaborative efforts and data sharing.
For more trending news articles like this, visit DeFi Daily News.
