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Former regulator and fintech staffer Luke Charters warned during a talk at Pay360 that unless social media companies start to take fraudulent payments more seriously, they face being regulated in the UK.
During a fireside chat at the Payments Association’s Pay360 event, the Labour member of parliament (MP) cautioned social media firms that they need to be voluntarily doing more to combat fraud if they do not want to face mandatory requirements via legislation.
Commenting on the Payment Systems Regulator’s (PSR) reimbursement policy, he echoed Labour and Conservative lawmakers on the Treasury Select Committee in praising the policy, calling it “a positive step”.
However, the York Outer MP branded it “more of a sticking plaster”, suggesting that other work needs to be done. He also empathised that payment service providers (PSPs) are currently solely responsible for reimbursing consumers despite fraudulent activity often not beginning on their networks.
Charters suggested that more data sharing initiatives are necessary, and that there needs to be a shift in policy from it being “reactive to proactive”.
The MP, who was previously a senior manager in compliance at the fintech company Remote, also served as a strategy lead in payments policy at the Financial Conduct Authority (FCA).
He said that social media firms “need to have skin in the game” and that they are in a “last chance saloon” regarding fraudulent activity.
“Its time to cough up,” he said, adding that firms such as Meta should “make that voluntary contribution now”.
Contributing to police funding
Charters suggested that Meta and other firms would do well to consider funding policing for fraudulent activity, just as organisations in industries such as banking and insurance already do.
For example, the Dedicated Card and Payment Crime Unit (DCPCU) is a joint Metropolitan Police Service/City of London Police team funded by the banking industry, with the sole purpose of combating crimes associated with banking and payments.
He described this as "an exciting window for Meta to step in and step up", and commended the company's Fraud Intelligence Reciprocal Exchange (FIRE) initiative, a programme that facilitates direct intelligence sharing between financial institutions and Meta to combat online scams, as a promising start that should now be expanded.
Charter's thoughts were echoed by the Conservative Party’s shadow economic secretary to the Treasury, Mark Garnier, who said during another talk at Pay360 that social media firms should be brought into the perimeter of fraud liability.
Garnier also said that the government should put forward stablecoin legislation sooner rather than later, warning that there is a risk that the UK could fall behind — something Charters also warned about during his talk.
