Starting from Oct. 7, banks will be required to start compensating victims of online fraud a maximum £85,000 in the U.K.
Tensions are escalating between banking and payment companies and social media firms in the U.K. over who should be liable for compensating people if they fall victim to fraud schemes online.Starting from Oct. 7, banks will be required to start compensating victims of so-called authorized push payment fraud a maximum £85,000 if those individuals affected were tricked or psychologically manipulated into handing over the cash.
But now that the mandatory fraud compensation is being rolled out in the U.K., questions are being asked about whether financial firms are facing the brunt of the cost for helping fraud victims.Woody Malouf, Revolut's head of financial crime, said that Meta and other social media platforms should help cover the cost of reimbursing victims of fraud and that, by sharing no responsibility in doing so,"they have no incentive to do anything about it.
More broadly, banks and regulators have long been pushing social media companies for more collaboration with retail banks in the U.K. to help combat the fast-growing and constantly evolving fraud threat. A key ask has been for the tech firms to share more detailed intelligence on how criminals are abusing their platforms.
She added that"absolute transparency" was needed on where the fraud was occurring so that regulators could know where to focus their efforts in the value chain. In written evidence to a parliamentary committee last year, the social media giant said that banks in the U.K. are"too focused on their efforts to transfer liability for fraud to other industries," adding that this"creates a hostile environment which plays into the hands of fraudsters."