Nandini Roy Choudhury, writer
Brief news
- Revolut criticized Meta’s approach to fraud prevention, urging for direct compensation to scam victims on its platforms.
- Revolut’s chief of financial crime described Meta’s efforts as inadequate, emphasizing the need for significant improvements.
- A report revealed Meta was linked to 62% of user-reported fraud on Revolut, with Facebook being the top source.
Detailed news
On Thursday, the British financial technology business Revolut voiced its disapproval of the method that Facebook parent corporation Meta takes to combating fraud. Revolut stated that the American technology giant should provide direct compensation to those who have been victimized by scams that occur through its social media platforms.
“The pact falls woefully short of what is required to tackle fraud globally,” Revolut stated on the same day that Meta launched a cooperation with NatWest and Metro Bank, two banks in the United Kingdom, on a data-sharing mechanism aimed to assist in preventing consumers from falling victim to fraud schemes.
Woody Malouf, Revolut’s chief of financial crime, stated in a statement that Meta’s initiatives to address financial fraud on its platforms are “baby steps,” when the industry requires “giant leaps forward.”
“These platforms have no incentive to address the issue, as they are not responsible for reimbursing victims.” Malouf continued, “A commitment to data sharing, while necessary, is insufficient.”
On October 7, the United Kingdom will implement new payment industry reforms that mandate that banks and payment firms provide a maximum compensation of £85,000 ($111,000) to victims of the so-called authorized push payment (APP) fraud.
The Payments System Regulator of Britain had previously recommended a maximum compensation amount of £415,000 for fraud victims. However, the regulator later withdrew this recommendation in response to criticism from banks and payment firms.
Malouf, the CEO of Revolut, stated that his organization is in agreement with the U.K. government’s efforts to combat fraud. However, he believes that Meta and other social media platforms should also contribute financially to those who are scammed as a result of schemes that originate on their platforms.
On Thursday, the fintech company released a report that claimed Meta was responsible for 62% of user-reported fraud on its online banking platform, a decrease from 64% the previous year.
The bank stated in its “Consumer Security and Financial Crime Report” that Facebook was the most prevalent source of all schemes reported by Revolut users, accounting for 39% of fraud. WhatsApp was the second-highest source of such events, with an 18% share.
Source : CNBC News
