UK Banks and Social Media Firms at Odds Over Fraud Compensation
Tensions are rising between UK banks and social media companies over who should bear the cost of compensating victims of online fraud. As of October 7, banks will be required to reimburse victims of authorized push payment (APP) fraud up to £85,000, a move that could prove costly for financial institutions. However, some argue that social media firms, where much of the fraud originates, should share the financial burden.
Revolut, a digital bank, has accused Meta of not doing enough to tackle fraud globally, saying the social media giant should help cover the cost of reimbursing victims. This is not a new complaint, as tensions have been building between banks and tech companies for some time. Online fraud has skyrocketed in recent years, with many scams originating on social media platforms.
The Labour Party has proposed forcing tech firms to reimburse victims of fraud, but it is unclear if the government will implement this measure. Industry experts argue that social media companies should take more responsibility for combating fraud on their platforms, sharing intelligence with banks and taking down suspect accounts.
Meta has pushed back, saying that banks are too focused on transferring liability to other industries, creating a hostile environment that benefits fraudsters. The company argues that cross-industry collaboration is key to addressing fraud, citing its Fraud Intelligence Reciprocal Exchange (FIRE) initiative as an example of how banks and tech firms can work together to stop fraud.
As the debate continues, one thing is clear: online fraud is a growing problem that requires cooperation between banks, social media companies, and regulators to combat. With millions of pounds at stake, it remains to be seen who will ultimately bear the cost of compensating victims of APP fraud.
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