Innovate Finance, the UK industry body for FinTech, has joined growing calls to hold social media platforms responsible for growing cases of online fraud in an effort to promote its anti-fraud strategy.

The industry body has created a plan – A Technology Strategy to Smash Fraud – with aims to halve the amount of fraud in the UK by 2028.

Measures included in this strategy range from improved data sharing to sharing liability with social media and telecommunications platforms, to building a ‘world beating UK anti-fraud tech industry.”

Fraud has a devastating effect on the UK economy, with the cost of payments fraud at least £1.2 billion annually.

The impact of fraud risks not only consumer confidence in digital finance, but also disproportionately affects those on lower incomes, and 70% of victims suffer wider negative impacts including mental and physical health and debt.

Social media platforms have been facing major scrutiny from fintech organisations, including challenger bank Revolut, for their contribution to the rise in online fraud. Major banks have called on social media platforms, like Facebook, and telco groups to share some liability for the rise of online fraud, which can often punish consumers – and their banks – financially.

Revolut found that over half (58%) of all UK fraud in 2024 could be traced back to Meta, which includes Facebook, Instagram, and WhatsApp.

Innovate Finance has joined calls for these platforms to share liability for fraud originating on their platforms.

“Fraud accounts for over 40% of crime but receives less than 1% of police resources,” Janine Hirt, CEO at Innovate Finance, said. “Given the scale of the threat posed to consumers and businesses alike, we urgently need a more collaborative, targeted, and effective strategy that aspires to smash fraud in the UK.

“This plan sets out how we can harness technology via data sharing to strengthen collaboration between industry and law enforcement. Current data sharing initiatives, while effective, operate in silos, which can make it difficult in practice. Critically, there is nothing in place with the critical mass or scale required to crush organised fraud. There is widespread agreement that establishing a National Anti Fraud Centre would be the appropriate vehicle to deliver this.

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“We also need to update our laws, including the Online Safety Act 2023, to make tackling crime a shared responsibility between payment providers and the social media and telecommunications firms that allow fraud to take place on their platforms.

“By acting now, the UK Government can lead the way in tackling fraud, protecting consumers and reinforcing its position as a global leader in secure and innovative finance.”

Innovate Finance’s report revealed some damning statistics regarding the origin of online fraud. The industry body found that three quarters (77%) of Authorised Push Payment (APP) fraud originates online, and the digital social platforms are the single largest source of fraud origination. Fraud originating from Meta constitutes 60.5% of all reports received, the industry body said.

However, it pointed out, payment service providers are solely responsible for reimbursing victims of fraud, which Innovate Finance says leaves a “significant responsibility gap.”

The industry body therefore calls on the government to update the Online Safety Act to introduce a reporting framework for fraud, a redress fund, distribution mechanism, and a dispute resolution process.