Scambook … how Meta has become the world’s biggest scambank

For years, banks have been criticised for fraud. Today, a growing number of bankers are asking a different question: why are banks paying for fraud that originates elsewhere?

Across the world, consumer groups, regulators, banks and campaigners are increasingly pointing to the same source of online scams: Meta’s platforms, particularly Facebook and Instagram.

This is no longer a story about a few rogue advertisements slipping through content moderation systems. It is becoming a debate about responsibility, accountability and whether social media platforms have become critical infrastructure for financial crime.

The issue has reached the courts in America. The Consumer Federation of America has sued Meta, alleging that the company misled consumers about its efforts to combat scam advertisements while continuing to profit from them. More significantly, Reuters reported that Meta’s own internal analyses estimated that its platforms were involved in around one-third of all successful scams in the United States. If accurate, that statistic alone should alarm policymakers.

In Britain, the debate has become increasingly personal.

At its centre is Martin Lewis, founder of MoneySavingExpert and arguably the UK’s most trusted personal finance expert. For years, Lewis has fought a relentless battle against fraudsters who use his name, image and reputation to promote fake investment schemes, cryptocurrency scams and fraudulent financial products. Despite legal action, public campaigns and repeated promises of improvement, Lewis recently warned that scam advertisements using his likeness are now “worse than ever”.

The irony is hard to miss. One of Britain’s most trusted consumer advocates has become one of Britain’s most impersonated financial personalities.

The numbers are equally troubling.

According to Lloyds Banking Group, approximately 68% of all scams are on Meta’s platforms. Even more striking, Lloyds estimates that around 70% of social media-enabled fraud losses suffered by its customers can be traced back to Facebook and Instagram. In other words, when Lloyds’ customers are scammed through social media, the overwhelming likelihood is that Meta was involved somewhere in the chain.

That matters because banks are the organisations that end up dealing with the consequences. They investigate cases, reimburse victims, absorb financial losses and invest billions in fraud prevention systems. Meanwhile, they argue, the platforms where many scams begin continue to earn advertising revenue.

What makes the story particularly compelling is that it is not confined to the UK or the US.

Thailand’s consumer watchdog has launched legal action against Meta over scam advertisements and fraudulent activity conducted through Facebook. Hong Kong authorities recently demanded the removal of fake advertisements impersonating trusted organisations and targeting scam victims. Similar concerns have emerged across Australia, Singapore and Europe.

Taken together, these developments paint a worrying picture. This is not simply a content moderation challenge. It is the emergence of a global scam economy operating at internet scale across some of the world’s largest digital platforms.

The question is therefore becoming unavoidable.

For decades, banks have been required to know their customers, monitor suspicious activity, detect money laundering and reimburse victims of authorised push payment fraud. They are heavily regulated because they sit at the centre of the financial system.

Social media companies, by contrast, have largely been treated as advertising businesses.

That distinction is becoming increasingly difficult to defend.

If a criminal pays to place an advertisement promoting a fake investment scheme, a fraudulent cryptocurrency offering or an impersonation of Martin Lewis, should the platform that distributes the advertisement bear responsibility for the outcome? More importantly, should it bear responsibility if it profits from that advertisement?

Meta argues that it is actively fighting fraud. The company says it removed more than 159 million scam advertisements and millions of scam-related accounts during the past year, many before they were reported by users. Those are impressive numbers.

Yet they also reveal the scale of the challenge.

Removing 159 million scam advertisements is not evidence that the problem is small. It is evidence that the problem is enormous and the deeper issue is not whether Meta is trying to combat scams. The deeper issue is whether the economics of digital advertising create incentives that place growth ahead of prevention.

Banks learned decades ago that trust is their most valuable asset. Social media platforms are now discovering the same lesson.

The future debate may not be about whether Meta hosts scam advertisements. It may be about whether platforms that distribute financial scams should be regulated more like financial institutions themselves.

That would represent a profound shift in public policy.

But when one of Britain’s largest banks says that more than two-thirds of its scam cases originate on a single company’s platforms; when Britain’s most trusted personal finance expert says the misuse of his identity is worse than ever; and when Meta’s own internal research suggests its platforms may be involved in one-third of successful scams in the United States; the discussion moves beyond content moderation. It becomes a question of systemic financial risk and that is a debate that regulators, banks and technology firms can no longer avoid.