Social Media in Scam Prevention
Two companies, Opinium, a market research firm, and Tunic Pay, an anti-fraud fintech company that helps well-known UK banks find and stop scams before they happen, recently surveyed 2,000 adults in the UK. They found that over two-thirds (69%) of adults think social media companies can do more to stop payment scams.
A recent change in banking regulation, mandating that all UK institutions reimburse customers proven victims of payment scams up to £85,000 per case, has led to these results. According to 63% of the research respondents, if a fraud is perpetrated on a social media platform, the platform should be held accountable and reimburse the user for all or a portion of the money they have lost.
- Social media platforms and banks share the responsibility.
- Only 21% of UK adults believe that social media companies, including Facebook, TikTok, Instagram, and X, are trying to combat payment schemes that originate on their platforms.
- While over half (51%) of UK adults hold banks and social media platforms equally accountable for their inability to prevent fraud, two-thirds (66%) advocate for their banks to increase their efforts in verifying the identity of payment recipients before completing transactions. In particular, seventy-three percent of respondents (73%) desire to see social media platforms and banks collaborate to assist consumers in verifying the authenticity of individuals before transferring funds.
- According to the most recent data from the UK Finance Department, 72% of authorized push payments (APP) frauds are initiated online**. This is equivalent to a loss of more than £150 million due to APP frauds in the first half of this year alone. However, the overwhelming volume of unreported cases has led industry bodies, such as UK Finance, to speculate that the true cost of APP scams could be up to ten times higher than official figures.
- Scams are causing losses for users of social media platforms, but the extent of these losses is not a concern.
- A recent survey reveals that 26% of UK adults are cutting back on their social media usage out of fear of fraud. This figure increases to 34% among those who have previously been targeted by fraudsters.
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Industry Comments
Nicky Goulimis, CEO of Tunic Pay, comments: “Social media companies are quickly running out of places to hide from calls by industry and consumers alike who want to see them act harder and faster to curb the proliferation of scams on their platforms. But, in reality, any chance these platforms will sit up and pay real attention remains slim while they don’t have to pay out, like banks do, when their users lose money to scams.”
Nico Barawid, Co-Founder of Tunic Pay, adds: “The APP fraud problem is widely believed to be as much as ten times bigger than reported. That makes it a £4-5bn issue. If social media companies start paying reparations to the tune of billions, they might find more motivation to put better checks in place.”
“Social media companies and banks should both be required to do more in the way of checks and should better share the responsibility for fraud. People don’t want to have to do all the checks and balances to make sure it’s not payment fraud. There’s an expectation that big businesses have the power to do that for them and so should.
FAQs
1. Who is responsible for preventing scams on social media platforms?
Both social media companies and banks share the responsibility of preventing scams. However, survey results indicate that users expect more significant efforts from these entities to ensure payment security.
2. What is the role of regulations in scam prevention?
UK banking regulations mandate that institutions reimburse victims of payment scams up to £85,000 per case, pushing the financial sector toward stronger fraud prevention strategies.
3. How can social media platforms better combat scams?
Social media platforms can enhance user verification processes, collaborate with banks, and implement stricter measures to detect and block fraudulent activities proactively.
Conclusion
The rise of scams originating on social media platforms highlights the critical need for collective action by both social media companies and banks. While consumers expect robust measures to prevent fraud, the current efforts by platforms fall short of expectations, as seen in the survey results. Collaborative solutions, where platforms and financial institutions share responsibilities, could pave the way for greater trust and security. Only through accountability and proactive measures can the industry effectively combat the growing threat of payment scams and ensure consumer safety in the digital era.
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