Revolut’s Social Media Fraud Report Encourages UK Fintechs to Call for Shared Fraud Responsibility

Fintechs and banks in the UK are piling pressure on social platforms to take a share of responsibility in addressing financial fraud, UK Tech News reported. This move comes weeks after a Revolut social media fraud report showed that scammers are increasingly using encrypted messaging platforms like WhatsApp and Telegram to exploit victims.

Push for Equal Responsibility

In the UK, financial fraud and scams are among the most common crimes. Authorized push payment (APP) is among the most prominent forms of fraud. This type of fraud occurs when scammers impersonate individuals or organizations, tricking people into making payments through online platforms. In 2023, financial fraud accounts for 40% of all crimes reported in the country.

To date, payment providers bear the highest burden of preventing scams and supporting scam victims. Revolut’s anti-scam strategy seeks to change this situation. Previously, Innovate Finance and Revolut, have emphasized the need for social media platforms to take more responsibility in compensating victims of fraud.

Several other fintechs have supported these calls. Calls for a more even responsibility split between players in the financial sector and social media platforms where most scams originate have been on the rise. Revolut has been the most vocal in calling for equal responsibility in fraud compensation. The ​​fintech startup received a UK banking license in July 2024 after a three-year struggle.

Meta Fraud Liability Fraud

As the largest digital bank in the UK, the platform has published several reports. The reports highlight why platforms like Meta need to share liability in reimbursing fraud.

One of Revolut’s Meta investigations found that over 50% of scams globally came from Meta platforms like Facebook and WhatsApp. Innovate Finance, the UK fintech trade body, later echoed the same. In its anti-fraud strategy report launched earlier this week, the fintech lobby group highlighted the need for social media fraud liability.

“Given the scale of the threat posed to consumers and businesses alike, we urgently need a more collaborative, targeted, and effective strategy that aspires to smash fraud in the UK,” Innovate Finance CEO Janine Hirt said.

Fintechs are not the only entities calling for expanded responsibility in tackling financial fraud. UK Banks such as Barclays have underscored the need for cross-sector participation. The British Bank says this participation should include financial, telecommunication, and social media sectors.
Barclays did not make a direct recommendation regarding reimbursement of fraud victims by these sectors. However, the bank supported a shared response to scams.

Growing Support

Other UK-based digital banks like Kroo support the call for social media scam responsibility. Kroo said that the fact that banks bear the biggest burden in fraud compensation is both disproportionate and unsustainable.

“We agree that payments firms and social media companies should share liability for fraud victim reimbursement. Fraud and fincrime rates are skyrocketing across the industry, with UK Finance (2022) reporting that 75% of online fraud begins on social media,” a Kroo spokesperson said.

Money transfer fintech Wise underscored the need for sector-wide coordination in combating financial fraud. Weighing in on the issue, a spokesperson from the company said,

“We recognise that stopping scams requires action across the whole ecosystem, from banks and payment providers, to telecommunications and digital platforms. We all have a role to play in preventing fraud and scams, and therefore we are supportive of data sharing initiatives to help disrupt criminal activity across the ecosystem.”

Another fintech company that supports the call for shared responsibility is Checkout.com. The payment services platform holds that fixing the financial fraud problem requires coordination and participation of every sector and business within the payment ecosystem.

“We welcome efforts that strengthen consumer protection and ensure all relevant parties take responsibility for ensuring safety and maintaining trust,” Checkout.com COO Jenny Hadlow said.