Financial leaders call for social media accountability to combat fraud

Financial leaders and central bankers are calling for increased accountability from social media platforms to combat rising financial harm and cyber fraud.

Andrew Bailey, Governor of the Bank of England, criticized the lack of liability for social media firms, describing certain activities on these platforms as ‘downright criminal’. He emphasized that because fraud is frequently transmitted through these channels, companies must be involved in addressing the problem. This follows instances where AI-deepfakes and fake news articles were used to exploit the public through fraudulent investment schemes.

In Australia, AMP has advocated for stronger governance, suggesting that social media platforms should be included in the Compensation Scheme of Last Resort (CSLR). AMP CEO Blair Vernon noted that social media posts and targeted advertisements often serve as the first contact for investment opportunities, which can lead to significant financial loss. The company highlighted that nearly two-thirds of Australians aged 18 to 28 use social media for financial guidance, a trend that could impact long-term retirement savings.

While some platforms like Meta have introduced credential verification for financial advertisers in Australia, leaders argue that more comprehensive frameworks are necessary to protect consumers from sophisticated digital scams.