Exclusive: Urgent pleas for Meta to tackle increasing scams on its platforms, projected to burden UK households with £250m in losses this year
The mounting pressure on social media giant Meta from MPs, consumer groups, and the UK banking sector intensifies as they criticize its inability to prevent a rampant surge of fraud on Facebook, Instagram, and WhatsApp. These platforms are witnessing substantial financial losses for Britons, leading to life-altering consequences on a daily basis.
In light of a recent Guardian investigation shedding light on the personal experiences of individuals affected by scams originating from Meta’s platforms, a nationwide estimate has been unveiled, projecting a staggering £250m cost to UK households in 2023 due to the company’s failure to eradicate fraud.
According to reports, a person in the UK falls victim to a purchase scam originating from either Facebook or Instagram every seven minutes. In response, the Guardian reached out to those who had fallen prey to scams on these platforms, as well as WhatsApp, encouraging them to share their stories.
One Facebook user recounted a distressing ordeal in which she lost her entire life savings and ended up in debt, totaling £70,000, after falling victim to an investment scam. While some individuals suffered significant financial losses, numerous unsuspecting online shoppers shared their experiences of being swindled out of smaller amounts when placing orders with fraudulent online stores advertised on Facebook and Instagram.
Among the most heart-wrenching stories shared were those of victims targeted by the WhatsApp “Hi Mum” impersonation scam, where fraudsters assume the identity of family members to deceive them into sending substantial sums of money.
Valerie, 73, who was among the many victims, handed over £2,000 to someone posing as her son, a small business owner who had previously borrowed money. Struggling with the effects of long Covid, she expressed that the humiliation of falling for this deception was something she would never be able to overcome.
Lucy Powell, the shadow digital, culture, media, and sport secretary, emphasized that social media executives have evaded accountability for an extended period.
“Despite the staggering extent of online scams, the government was reluctant to include fraud and scams in the online safety bill, only to dilute and postpone it at the eleventh hour,” she remarked.
“It’s time for them to stop yielding to vested interests and advocate for the rights of consumers and victims.”
The online safety bill currently progressing through parliament will mandate tech and social media platforms to remove fraudulent advertisements. Meanwhile, the government’s new anti-fraud measures involve requesting tech firms to streamline fraud reporting and granting banks the authority to delay suspicious transactions. However, there are no provisions requiring tech platforms to compensate customers for scams.
Robin Bulloch, CEO of TSB, expressed deep concern regarding the alarming levels of fraud occurring on Meta’s platforms. He stated, “As the only bank offering a fraud refund guarantee, we possess unparalleled insight into this issue, and it is devastating to witness UK households losing life-altering sums every day due to insufficient protection on Meta platforms.
As banks face substantial refund obligations, TSB, Barclays, Nationwide, and Starling Bank are among the institutions arguing that the California tech giant, valued at $700 billion, should bear some financial responsibility for these costs. Meta, known for its advertising prowess, generates enormous revenues, as evidenced by the accounts of Facebook’s UK operations, which revealed a staggering 37% surge in gross income from advertisers in 2022, reaching £3.3 billion.
Matt Hammerstein, CEO of Barclays UK, echoed the severity of the situation, describing the country as experiencing an “epidemic of scams.” According to their data, 77% of these scams occur on tech platforms, including social media sites and online marketplaces.
Concha emphasized that banks should not evade responsibility for compensating fraud victims. He highlighted that banks play a role in facilitating scams by transferring funds to fraudsters, and further exacerbate the financial and emotional impact on victims by treating them as culprits and denying reimbursement. Concha stressed the importance of the financial services and markets bill, which will establish new regulations mandating that the vast majority of fraud victims be reimbursed by their bank or payment provider, and urged for its swift enactment into law.
When questioned about the prevalence of scams, Meta acknowledged that fraud is a pervasive issue across the industry, with scammers employing increasingly sophisticated methods. They expressed their commitment to preventing individuals from falling victim to scams, mentioning that their platforms incorporate systems to block fraudulent activities. Additionally, they stated that financial services advertisers now undergo authorization processes, and they actively engage in consumer awareness campaigns to educate users on identifying fraudulent behavior.
