The parent company of Facebook and Instagram came under scrutiny from the Home Affairs Select Committee
Meta, the parent company of Facebook and Instagram, has been accused by MPs of not taking online fraud on its platforms seriously.
This comes after banking sector representatives told the Home Affairs Select Committee that the “majority” of scams they encounter originate on Meta platforms. Paul Davis, financial crime prevention director at TSB, informed the committee that Facebook Marketplace is the main source of purchase scams.
He said these, along with investment and impersonation scams, are the most common types of fraud affecting bank customers. Mr Davis told MPs: “For those three types, which as I say are the main ones, we see about 80% start on social media.”
He added: “Indeed, let’s not walk past the fact that, when I say social media there, the majority of them start from the channels owned by one company in particular, which is Meta. Facebook Marketplace doesn’t have a payments channel attached to it, it’s not like a website you might use to buy something off a high street shop, for example, or Amazon.
“So, you have to get bank details from the seller of that item. What we see are customers telling us that they get bank details from the seller, send them money and then the item never turns up.”
In response to these accusations, Philip Milton, public policy manager for fraud at Meta, assured the committee that the tech giant takes the issue “extremely seriously”. Mr Milton, when challenged by the committee that evidence given to MPs by the banks shows Meta is not doing all it can to prevent online fraud, responded: “I disagree with that.”
He further explained: “To give you an idea of the scale that we’re putting in place to tackle this kind of thing, since 2016 we’ve invested 20 billion dollars on safety and security, and that’s not slowing down five billion of that was in the last year alone. We have 40,000 people working across the company on safety and security.
“Half of that number are involved in directly reviewing content, so we invest significantly in trying to prevent this kind of thing from happening.” he added. He also said that fraud “fundamentally undermines the experience we’re trying to provide for people” and said this, combined with fraudulent advertising affecting trust in the company from advertisers and its wider reputation, means the firm is “directly incentivised” to do all it can to prevent criminal activity.
However, committee member Tim Loughton, Conservative MP for East Worthing and Shoreham, argued that the five billion dollars Meta said it spent last year on safety and security equates to less than 4% of the firm’s annual revenue for the year a figure he suggested is “not very high”.
Mr Loughton expressed doubts on whether the 20,000 people reviewing content for Meta were enough considering the social media site has “four billion active accounts”. He said that Meta isn’t taking the issue “terribly seriously” due to Facebook Marketplace not being financially liable for fraud as it doesn’t have a linked payment channel.
“You apparently have no financial skin in the game for clamping down on fraud on Facebook Marketplace other than potential reputational damage,” he said.
He questioned: “Unless there’s a clear link with advertisers walking away with their revenue because they’re concerned at (banking sector research showing) 80% of fraud starting on (social media platforms) and 68% of it specifically your platforms, then you don’t really have to take it terribly seriously and the fact you’re spending five billion dollars out of an annual revenue of 134.9 billion, which, as I say, is three and a bit percent for a people-based service, is tiny.”
He continued to challenge: “So you’re not taking this problem seriously, are you?” Mr Milton disagreed, saying: “I don’t agree with that at all”, and maintained that “the scale of our investment demonstrates how seriously we take this problem”, highlighting that it’s “market-leading” levels of spending for safety and security.
He said that to stop scammers who ask for payment or want you to send stuff before they pay, Meta has “removed the ability to ship an item on Facebook Marketplace”. Now there’s “no way to pay for an item” there because they’re trying to stop crooks from using it to trick people.
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