Major bank calls out Meta for huge rise in scams on its platforms

A major bank has called on Meta to do more about the fraud spreading on its platforms, including Whatsapp, as it exposes the scale of social media scams.

TSB has criticized Meta for revealing that scams through its companies are responsible for 80 percent of bank fraud cases within the three largest fraud categories.

TSB, which has 5 million customers in the UK, has warned consumers to be wary of fraud on Facebook, Whatsapp and Instagram.

Banks have long warned of the dangers of social media scams, but TSB is one of the first to break the cover and call directly on Meta to clean up its act.

Paul Davis, director of fraud prevention at TSB, told This is Money, “Social media companies urgently need to clean up their platforms to protect the countless innocent people who use their services every day.”

Facebook Marketplace has been the biggest hotbed of fraud, accounting for three-fifths of purchase fraud cases, followed by Instagram, accounting for 18 percent of cases.

Facebook Marketplace has exploded in popularity in recent years. Sellers list goods and arrange a sale with potential buyers through Facebook’s built-in messaging platform.

Originally, buyers could look at what someone in their neighborhood was selling and hand over cash at the door at no cost. This was especially useful for larger items such as furniture.

But as popularity has grown, more and more items are sold over a greater distance and items are usually shipped.

Unlike other platforms like eBay and Amazon, Facebook doesn’t have its own payment platform, which means shoppers often use wire transfers to send money directly.

Because of this, they do not have the protections offered by PayPal or credit and debit cards, where payments can be reversed if goods and services are not provided as advertised.

As more consumers turn to Facebook to buy second-hand goods to save money in the cost-of-living crisis, the amount of fraud on the platform continues to increase.

TSB said scam activity on Facebook Marketplace was up 97 percent in a year, and Facebook alone had refunded more than 2,000 cases.

Last November, we revealed how bank bosses labeled Facebook Marketplace as the Wild West of fraud.

> Get the latest on the scams doing the rounds and advice on how to beat them in our special Beat the Scammers section.

The number of ‘mum and dad’ Whatsapp scams is skyrocketing

Another scam that has claimed thousands of victims is the so-called impersonation scam.

This is when a scammer contacts you from your bank, the police or another trusted organization to convince you to send them money.

The criminals often use a tactic called “spoofing” to make their call or text look real by cloning the number or sender ID.

The ‘Mum and Dad’ Whatsapp scam is another popular trick used by scammers, where scammers pose as the victim’s son or daughter and ask for money urgently.

Last year, This Is Money reported the story of Moira Spearman. Moira, 71, received a message from an unknown number, claiming it was her daughter who broke her phone.

At the time, Moira had never heard of the ‘mum and dad’ scam and transferred £719 to a bank account, thinking her daughter would use it to pay bills.

It was only when she was asked for a second payment of £820 that she realized she had been duped.

TSB’s figures show that this type of fraud on Meta’s platforms accounts for 86 percent of all imitation fraud cases during the year.

Fraud via Whatsapp accounted for two-thirds of cases, up 300 percent in just a year, with more than 550 cases reimbursed by the bank.

Nationwide Building Society said it had seen more WhatsApp scams in recent years and scammers were targeting older consumers. The average age of the victims is 65 years.

Santander has also seen a marked rise in impersonation scams this year, with fraudsters even trying to impersonate their head of fraud risk management Chris Ainsley.

“Scammers leave no stone unturned to deceive victims, and as someone who works with colleagues across Santander to protect customers from fraud, it was quite a surprise to find scammers impersonating me,” he said.

“Imitation in this case is certainly not a form of flattery, but instead a timely reminder that no one from a bank or legitimate organization would ever try to rush you into transferring money to another account.”

Data from Santander shows £10.2 million worth of imitation scams took place between January and March this year, an 11 per cent increase on the same period last year. The average reported loss per customer was £6,906.

A banking insider told This Is Money that the scam through WhatsApp was much bigger than the fraud on any other platform.

While Instagram has fewer instances of purchase and impersonation fraud, it is the go-to place for investment scams.

Scammers often promise life-changing returns through their get-rich-quick schemes on Instagram, and TSB says these now make up 59 percent of all investment fraud cases.

Banks call on Meta to take responsibility

TSB says it has refunded 97 percent of cases – but that’s not the case with all major banks, with some refunds at much lower levels than this.

Banks believe that Meta and other platforms should take more responsibility.

Jim Winters, economic crime director at Nationwide, said: “The exponential rise of social media has brought with it an increased risk of fraud and scams.

‘The controls have yet to catch up with those of other industries, so that criminals can almost freely target victims, especially on platforms such as Marktplaats and Whatsapp.

“We have to tackle this problem collectively to prevent the problem from getting bigger and more victims losing money unnecessarily.

“To do that, we need a collaborative approach where social media platforms, including Meta, work with telecoms, financial services and government to stop fraud from the start — not just after the criminals have struck.”

Santander echoed the sentiment, claiming that 70 percent of APP fraud came from major tech and social media platforms.

A spokesperson said: ‘It will be essential to make it more difficult for fraudsters to target consumers on these platforms to stop them at source.’

‘Currently, only banks are responsible for repayment if customers unexpectedly fall victim to fraud, but it is essential that all sectors are encouraged to invest in prevention.’

Meta recently launched a scam awareness campaign by Whatsapp and the National Trading Standards, although this will offer little comfort to those who have already been scammed out of thousands.

A spokesperson for Meta said: ‘This is an industry-wide problem and scammers are using increasingly sophisticated methods to scam people in a variety of ways, including email, text and offline.

“We don’t want anyone to fall victim to these criminals. That’s why our platforms have systems in place to block scams, financial services advertisers are now required to be FCA authorized, and we run consumer awareness campaigns to spot fraudulent behavior.

“People can also report this content with a few simple clicks and we are working with the police to support their investigation.”

Earlier this week, the government announced stricter measures to tackle fraud.