U.K. FinTech Revolut has reportedly criticized Meta’s approach to combating financial fraud.
As CNBC reported Thursday (Oct. 3), Revolut argues that the Facebook owner should be the one to provide compensation when scammers prey upon its users.
This comes one day after Meta announced it was working with British banks MetroBank and NatWest on a data-sharing project designed to protect customers from scams.
However, Revolut said this effort “falls woefully short of what’s required to tackle fraud globally,” CNBC said, quoting a statement from Woody Malouf, Revolut’s head of financial crime.
He argues that what Meta and the banks are doing constitute “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,” added Malouf.
A spokesperson for Meta told CNBC via email 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. “We encourage banks including Revolut to join in this effort.”
Meta’s Fraud Intelligence Reciprocal Exchange (FIRE) is a “threat intelligence sharing program” that allows banks to share information with Meta directly so the tech giant can use it to prevent online scams.
The company says an early test of the program helped bust a “significant concert ticket scam network” targeting people in the U.K. and the United States, with data shared between the banks and Meta allowing the company to take down around 20,000 scam accounts.
This is happening just days after the advent of new regulations in Great Britain requiring banks and payment companies to reimburse victims of authorized push payment (APP) fraud a maximum compensation of 85,000 pounds ($111,000).
Revolut is not the first financial institution to argue that tech companies should play a greater role in reimbursing APP fraud victims.
As noted here last month, industry lobbying groups are arguing that most APP fraud cases have their genesis on online platforms and social media sites such as TikTok or Facebook.
“The wider ecosystem, and key players in that ecosystem, have to be held to account,” said David Callington, head of fraud at HSBC UK.
Although banks need to be on guard, the financial obligations need to “sit with those other sectors as well. They need the financial incentive,” he said.
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