facebook owner Meta has announced a new data-sharing partnership with UK banks in an effort to combat fraud. The move comes as the social media platform faces increasing pressure from lenders and politicians to take stronger action against scams. Meta’s Fraud Intelligence Reciprocal Exchange will allow banks to share transaction intelligence with the company, aiding in the identification of scammers. The initiative follows a successful pilot program with NatWest and Metro Bank, which resulted in the closure of 20,000 fraudulent accounts after banks shared links to malicious websites involved in fraudulent transactions.
The expansion of this partnership is timely, as the tech sector faces scrutiny for its role in enabling authorized push payment (APP) fraud. According to UK Finance, Britons lost £460 million to APP fraud last year, with 70% of cases involving online orders that were never delivered. Lloyds Banking Group and TSB have identified false advertisements on social media platforms like facebook Marketplace and Instagram as major sources of purchase fraud.
Nathaniel Gleicher, global head of counter-fraud at Meta, expressed enthusiasm for more banks joining the partnership but cautioned that it is not a standalone solution for reducing fraud. Rocio Concha from consumer group Which? welcomed the collaboration but emphasized the need for greater cooperation between businesses and government entities.
Tech companies have faced criticism from both banks and politicians regarding their efforts to combat fraud. Labour accused tech companies of making minimal contributions towards tackling online scams or compensating victims. However, Meta is a signatory to an online fraud charter established last year between tech firms and the government aimed at reducing fraudulent activities.
Despite industry initiatives against fraud, cases of APP scams increased by 12% in 2023 compared to previous years according to UK Finance data. To address this issue, new rules effective from October 7 will hold banks and payment companies liable for reimbursing victims up to £85,000 per claim. The financial sector argues that sharing some costs with tech companies would incentivize them further in addressing underlying issues related to fraud prevention.
Meta’s incentives for fighting fraud include user satisfaction within their community as well as avoiding potential fines imposed by media regulator Ofcom under the Online Safety Act. Mark Tierney from Stop Scams UK praised Meta’s initiative as potentially transformative for reporting fraudulent content.
