Meta is facing calls from U.K. banks and payment firms like Revolut to financially compensate people who fall for scams on their services.
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Tensions are escalating between banking and payment companies and social media firms in the U.K. over who should be liable for compensating people if they fall victim to fraud schemes online.
Starting from Oct. 7, banks will be required to start compensating victims of so-called authorized push payment (APP) fraud a maximum £85,000 if those individuals affected were tricked or psychologically manipulated into handing over the cash.
APP fraud is a form of a scam where criminals attempt to convince people to send them money by impersonating individuals or businesses selling a service.
The £85,000 reimbursement sum could prove costly for large banks and payment firms. However, it’s actually lower than the mandatory £415,000 reimbursement amount that the U.K.’s Payment Systems Regulator (PSR) had previously proposed.
The PSR backed down from its bid for the lofty maximum compensation payout following industry backlash, with industry group the Payments Association in particular saying it would be far too costly a sum tor the financial services sector to bear.
But now that the mandatory fraud compensation is being rolled out in the U.K., questions are being asked about whether financial firms are facing the brunt of the cost for helping fraud victims.
On Thursday, London-based digital bank Revolut accusedMeta of falling “woefully short of what’s required to tackle fraud globally.” The Facebook-owner announced a partnership earlier this week with U.K. lenders NatWest and Metro Bank, to share intelligence on fraud activity that takes place on its platforms.
Woody Malouf, Revolut’s head of financial crime, said that Meta and other social media platforms should help cover the cost of reimbursing victims of fraud and that, by sharing no responsibility in doing so, “they have no incentive to do anything about it.”
Revolut’s call for large tech platforms to financially compensate people who fall for scams on their websites and apps isn’t new.
Proposals to make tech firms liable
Tensions have been running high between banks and tech companies for some time. Online fraud has risen dramatically over the last several years due to an acceleration in the usage of digital platforms to pay others and buy products online.
In June, the Financial Times reported that the Labour Party had drafted proposals to force technology firms to reimburse victims of fraud that originates on their platforms. It is not clear whether the government still plans to require tech firms to pay compensation out to victims of APP fraud.
A government spokesperson was not immediately available for comment when contacted by CNBC.
Matt Akroyd, a commercial litigation lawyer at Stewarts, told CNBC that, after their victory on lowering the maximum reimbursement limit for APP fraud down to £85,000, banks “will receive another boost if their efforts to push the government to place some regulatory liability on tech companies is also successful.”
However, he added: “The question of what regulatory regime could cover those companies who do not play an active role in the PSR’s payment systems, and how, is complicated meaning that this issue is not likely to be resolved any time soon.”
More broadly, banks and regulators have long been pushing social media companies for more collaboration with retail banks in the U.K. to help combat the fast-growing and constantly evolving fraud threat. A key ask has been for the tech firms to share more detailed intelligence on how criminals are abusing their platforms.
At a U.K. finance industry event focusing on economic fraud in March 2023, regulators and law enforcement stressed the need for social media companies to do more.
“We hear anecdotally today from all of the firms that we talk to, that a large proportion of this fraud originates from social media platforms,” Kate Fitzgerald, head of policy at the PSR, told attendees of the event.
She added that “absolute transparency” was needed on where the fraud was occurring so that regulators could know where to focus their efforts in the value chain.
Social media firms not doing enough to combat and remove attempts to defraud internet users was another complaint from regulatory authorities at the event.
“The bit that’s missing is the at-scale social media companies taking down suspect accounts that are involved in fraud,” Rob Jones, director general of the National Economic Crime Centre, a unit of the U.K. National Crime Agency, said at the event.
Jones added that it was tough to “break the inertia” at tech companies to “really get them to get after it.”
Tech firms push ‘cross-industry collaboration’
Meta has pushed back on suggestions that it should be held liable for paying out compensation to victims of APP fraud.
In written evidence to a parliamentary committee last year, the social media giant said that banks in the U.K. are “too focused on their efforts to transfer liability for fraud to other industries,” adding that this “creates a hostile environment which plays into the hands of fraudsters.”
The company said that it can use live intelligence from big banks through its Fraud Intelligence Reciprocal Exchange (FIRE) initiative to help stop fraud and evolve and improve its machine learning and AI detection systems. Meta called on the government to “encourage more cross-industry collaboration like this.”
In a statement to CNBC Thursday, the tech giant stressed that banks, including Revolut, should look to join forces with Meta on its FIRE framework to facilitate data exchanges between the firm and large lenders.
FIRE “is designed to enable banks to share information so we can work together to protect people using our respective services,” a spokesperson for Meta said last week. “Fraud is a multi-sector spanning issue that can only be addressed by working collaboratively.”
An iPhone 16 signage is seen on the window at the Fifth Avenue Apple Store on new products launch day on September 20, 2024 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
The Indonesian government expects Apple to increase its proposed $100 million investment into the country, according to state media, as the iPhone maker seeks clearance from Jakarta to sell its latest phones.
The American tech giant’s latest smartphone model doesn’t meet Indonesia’s 40% domestic content requirements for smartphones and tablets and hasn’t been granted clearance to be sold in the country.
The purpose of the ban is to protect local industry and jobs, with officials asking Apple to increase its investments and commitments to the economy in order to gain greater access.
According to a report from Indonesian state media, the country’s Ministry of Industry met with representatives from Apple on Thursday regarding its proposal to invest $100 million over two years.
The funds would go toward a research and development center program and professional development academy in the country, as per the report.
The company also plans to produce accessory product components, specifically mesh for Apple’s AirPods Max, starting in July 2025, it added.
Apple didn’t immediately respond to a request for comment from CNBC.
While the new offer is 10 times larger than a proposal that was reported earlier, the government is still striving to sweeten the deal to get a “fair” commitment.
“From the government’s perspective, of course, we want this investment to be larger,” industry ministry spokesperson Febri Hendri Antoni Arif told state media on Thursday.
He said that a larger investment would help the development of Indonesia’s manufacturing sector, adding that its domestic industry was capable of supporting production of Apple devices such as chargers and accessories.
While Indonesia represents a small market for Apple, it also offers growth opportunities as it has the world’s fourth-largest population, according to Le Xuan Chiew, a Canalys analyst focusing on Apple strategy research.
“Its young, tech-savvy population with growing digital literacy aligns with Apple’s strategy to expand [global sales],” he said, noting that it also offers potential for manufacturing and assembly that supports Apple’s efforts to diversify its supply chain.
Success in this market requires a long-term approach, and Apple’s investment offer demonstrates a commitment to complying with local regulations and paving the way for future growth, he added.
Intuit CEO Sasan Goodarzi speaks at the opening night of the Intuit Dome in Los Angeles on Aug. 15, 2024.
Rodin Eckenroth | Filmmagic | Getty Images
Intuit shares fell 6% in extended trading Thursday after the finance software maker issued a revenue forecast for the current quarter that trailed analysts’ estimates due to some sales being delayed.
Here’s how the company performed in comparison with LSEG consensus:
Earnings per share: $2.50 adjusted vs. $2.35 expected
Revenue: $3.28 billion vs. $3.14 billion
Revenue increased 10% year over year in the quarter, which ended Oct. 31, according to a statement. Net income fell to $197 million, or 70 cents per share, from $241 million, or 85 cents per share, a year ago.
While results for the fiscal first quarter topped estimates, second-quarter guidance was light. Intuit said it anticipates a single-digit decline in revenue from the consumer segment because of promotional changes for the TurboTax desktop software in retail environments. While that will affect revenue timing, it won’t have any impact on the full 2025 fiscal year.
Intuit called for second-quarter earnings of $2.55 to $2.61 per share, with $3.81 billion to $3.85 billion in revenue. The consensus from LSEG was $3.20 per share and $3.87 billion in revenue.
For the full year, Intuit expects $19.16 to $19.36 in adjusted earnings per share on $18.16 billion to $18.35 billion in revenue. That implies revenue growth of between 12% and 13%. Analysts polled by LSEG were looking for $19.33 in adjusted earnings per share and $18.26 billion in revenue.
Revenue from Intuit’s global business solutions group came in at $2.5 billion in the first quarter. The figure was up 9% and in line with estimates, according to StreetAccount. Formerly known as the small business and self-employed segment, the group includes Mailchimp, QuickBooks, small business financing and merchant payment processing.
“We are seeing good progress serving mid-market customers in MailChimp, but are seeing higher churn from smaller customers,” Sandeep Aujla, Intuit’s finance chief, said on a conference call with analysts. “We are addressing this by making product enhancements and driving feature discoverability and adoption to improve first-time use and customer retention.”
Better outcomes are a few quarters away, Aujla said.
CreditKarma revenue came in at $524 million, above StreetAccount’s $430 million consensus.
At Thursday’s close, Intuit shares were up about 9% so far in 2024, while the S&P 500 has gained almost 25% in the same period.
On Tuesday Intuit shares slipped 5% after The Washington Post said President-elect Donald Trump’s proposed “Department of Government Efficiency” had discussed developing a mobile app for federal income tax filing. But a mobile app for submitting returns from Intuit is “already available to all Americans,” CEO Sasan Goodarzi told CNBC’s Jon Fortt.
Goodarzi said on CNBC that he’s personally communicating with leaders of the incoming presidential administration.
On the earnings call, Goodarzi sounded optimistic about the economy.
“Our belief, which is not baked into our guidance, is that we will see an improved environment as we look ahead in 2025, particularly just with some of the things that I mentioned earlier around just interest rates, jobs, the regulatory environment,” he said. “These things have a real burden on businesses. And we believe that a better future is to come.”
Bluesky has surged in popularity since the presidential election earlier this month, suddenly becoming a competitor to Elon Musk’s X and Meta’s Threads. But CEO Jay Graber has some cautionary words for potential acquirers: Bluesky is “billionaire proof.”
In an interview on Thursday with CNBC’s “Money Movers,” Graber said Bluesky’s open design is intended to give users the option of leaving the service with all of their followers, which could thwart potential acquisition efforts.
“The billionaire proof is in the way everything is designed, and so if someone bought or if the Bluesky company went down, everything is open source,” Graber said. “What happened to Twitter couldn’t happen to us in the same ways, because you would always have the option to immediately move without having to start over.”
Graber was referring to the way millions of users left Twitter, now X, after Musk purchased the company in 2022. Bluesky now has over 21 million users, still dwarfed by X and Threads, which Facebook’s parent debuted in July 2023.
X and Meta didn’t immediately respond to requests for comment.
Threads has roughly 275 million monthly users, Meta CEO Mark Zuckerberg said in October. Although Musk said in May that X has 600 million monthly users, market intelligence firm Sensor Tower estimates 318 million monthly users as of October.
Bluesky was created in 2019 as an internal Twitter project during Jack Dorsey’s second stint as CEO, and became an independent public benefit corporation in 2022. In May of this year, Dorsey said he is no longer a member of Bluesky’s board.
“In 2019, Jack had a vision for something better for social media, and so that’s why he chose me to build this, and we’re really thankful for him for setting this up, and we’ve continued to carry this out,” said Graber, who previously founded Happening, a social network focused on events. “We’re building an open-source social network that anyone can take into their own hands and build on, and it’s something that is radically different from anything that’s been done in social media before. Nobody’s been this open, this transparent and put this much control in the users hands.”
Part of Bluesky’s business plan involves offering subscriptions that would let users access special features, Graber noted. She also said that Bluesky will add more services for third-party coders as part of the startup’s “developer ecosystem.”
Graber said Bluesky has ruled out the possibility of letting advertisers send algorithmically recommended ads to users.
“There’s a lot on the road map, and I’ll tell you what we’re not going to do for monetization,” Graber said. “We’re not going to build an algorithm that just shoves ads at you, locking users in. That’s not our model.”
Bluesky has previously experienced major growth spurts. In September, it added 2 million users following X’s suspension in Brazil over content moderation policy violations in the country and related legal matters.
In October, Bluesky announced that it raised $15 million in a funding round led by Blockchain Capital. The company has raised a total of $36 million, according to Pitchbook.