Revolut Criticizes Meta’s New Collaborative Approach to Handling Scams

• Meta recently joined hands with two UK banks-NatWest and Metro Bank-in a first-of-its-kind information-sharing partnership to combat online financial scams.
• However, Revolut has criticized this initiative, saying it's not enough.
• It also added that since social media sites are a major source of online scams, they should also be responsible for compensating the victims.

On Thursday last week, British financial technology firm Revolut criticized Meta for its new approach to handling fraud.

Meta recently joined hands with NatWest and Metro Bank in a first-of-its-kind information-sharing partnership, with many more banks expected to follow.

Under this initiative, Meta is expanding its Fraud Intelligence Reciprocal Exchange (FIRE) service by collaborating with banks. The banks will share information with Meta, which it will then use to train its systems and detect scams quickly and more effectively.

While this initiative was applauded by many, Revolut criticized it the very next day. In a statement, Woody Malouf, Revolut's head of financial crime, said that the initiative falls short of what's really needed to handle the problem of fraud globally.

Meta is taking baby steps when what the industry really needs is giant leaps forward," he added.

Compensating Victims: If Banks Are Held Responsible, Why Not Meta?

I feel that Revolut's main grievance stems from the UK's new compensation rule. According to the new payment reforms that are coming into force from October 7, banks and financial institutions are required to compensate victims of authorized push payment (APP) fraud with up to 85,000 ($111,000).

The initial recommended amount was up to 415,000. However, following a backlash from banks, it was reduced to 85,000.

It's worth noting that the responsibility to compensate victims is only imposed on banks, not social media sites, which often play a major role in such frauds.

Maybe this is what annoys Malouf, seeing as he said that since Meta has no responsibility for reimbursing the victims, it doesn't have any real incentive to do something serious about it.

Malouf also added that simple data sharing isn't enough. Social media sites should be made to compensate the victims who fall victim to such scams on their sites.

Revolut also published a report on Thursday that showed that for more than 62% of users who reported falling victim to financial crimes on Fintech, the scam originated from Meta. This number was 64% last year.

Out of this, 39% of the scams originated from Facebook and 18% came from WhatsApp, both of which are owned by Meta.

While Revolut's criticism might sound salty, it's hard to argue against the facts and figures it has presented. Will Meta respond? Stay tuned to find out.

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