UK Banks Call for Greater Accountability from Social Media Platforms Amid Ongoing Fraud Crisis

UK banks are urging social media platforms to take more responsibility in the battle against fraud, as new data reveals that scams continue to thrive through online channels. According to UK Finance, criminals stole £571 million through both unauthorised and authorised card payment fraud during the first half of 2024.

Although this represents a slight 1.5% decline compared to the same period in 2023—largely due to a reduction in authorised push payment (APP) fraud—the figures underscore a persistent problem: social media platforms are still a significant source of fraudulent activity.

UK Finance reports that 72% of APP scams, where victims are tricked into transferring money, originated on social media. Telecommunications networks were responsible for 16% of these cases.

“Not only do criminals take advantage of these platforms to encourage the transfer of money through investment, romance or purchase scams, but they also use scam phone calls, text messages, and emails to trick people into handing over personal details and passwords,” UK Finance said in a statement.

“We need the social media, technology, and telecommunications sectors to do far more in partnership with us to protect the public and society from fraud.”

This latest call for action comes as the UK Payment Systems Regulator stressed the importance of social media companies stepping up their efforts in what it described as a “war of attrition” against financial fraud. The regulator noted that current measures are inadequate to address the increasingly sophisticated tactics used by cybercriminals.

In response to the rising fraud threat, the UK government has implemented several initiatives to better protect victims. Among these is a new rule that allows banks to delay suspicious payments for up to 72 hours, providing more time to investigate potential fraud. Additionally, new regulations introduced by the payments regulator now hold payment providers liable for up to £85,000 in APP fraud losses.

Despite some progress, UK Finance's data highlights ongoing challenges. While APP fraud losses dropped by 11% to £214 million in the first half of 2024, unauthorised card payment fraud surged. Losses from unauthorised payments—covering payment cards, remote banking, and cheques—increased by 5% year-on-year, reaching £358 million. The number of unauthorised fraud cases also spiked by 19%, surpassing 1.5 million incidents in the same period.

UK Finance noted that fraudsters are increasingly using sophisticated social engineering techniques to convince customers to share one-time passcodes, allowing them to authenticate fraudulent transactions. The report also cautioned that online shoppers seeking deals on social media are particularly susceptible to scams.

“When a customer goes to buy a product advertised on a ‘fake’ social media profile, the criminal uses stolen card details to purchase the item from a legitimate source, keeping the payment from the customer,” the report explained.

Banks have ramped up efforts to counter fraud, blocking £711 million worth of unauthorised scam payments in the first half of the year, according to UK Finance. However, industry leaders warn against complacency.

“It’s encouraging to see declines in certain fraud categories, in particular APP, thanks in most part to strong investment by banks, along with industry collaboration and education programmes,” said Dan Holmes, director of banking fraud, identity, and market strategy at Feedzai, a software group.

Still, Holmes cautioned that the rise in unauthorised fraud across multiple channels “reminds us that we cannot be complacent.”

As financial crimes continue to evolve, banks are calling for a shared responsibility in fraud prevention, with social media platforms, technology providers, and the banking industry all playing a crucial role in protecting consumers and reducing the overall impact of fraud.

By fLEXI tEAM