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Social media platforms must take greater responsibility for combating AI-fuelled Authorised Push Payment (APP) fraud, which is costing consumers and payment service providers millions, says Lord McNicol
Online shopping is easy, convenient and sometimes dangerous.
The arrival of AI has seen an explosion in fake advertising online and the UK has become a prime target for fraudsters.
Scam ads use AI tools to impersonate trusted brands and exploit social media algorithms to appear at the top of our search results.
They offer fake products that are in high demand and phoney services. They steal our money, financial information or log in credentials.
Social media sites like X, Facebook and Instagram are awash with scam ads and, if we are honest, we often don’t check whether an advert is real or fake before we buy something or hand over sensitive information.
This crime is known as Authorised Push Payment fraud because you are conned into voluntarily handing over your money or bank details.
Chances are it has happened to you or someone you know. Every shopper online currently sees an estimated 185 scam ads a month.
In the UK it is estimated there were 95bn scam ad impressions in 2025. This figure is set to rise to 137bn by 2030.
Thanks to the government’s strengthening of consumer protection laws, shoppers who fall foul of scam ads are rarely left out of pocket. Since October, 2024, payment service providers have reimbursed 87 per cent of all scam-related losses.
However, it all adds up for payment service providers. According to recent data from Juniper Research, UK shoppers lost £44m to fake ad scams in 2025 – that figure is set to rise to £84m by 2030.
It is estimated that social media platforms generated £3.8bn in revenue from scam ads in 2025, roughly ten per cent of all social media ad revenue
In contrast, social media platforms are raking in the revenue from advertising, regardless of whether it is real or fake.
It is estimated that social media platforms generated £3.8bn in revenue from scam ads in 2025, roughly ten per cent of all social media ad revenue. Advertising on social media is set to grow by 120 per cent in the next five years to be worth £84bn by 2030.
Social media giants are getting richer on the proceeds of scam ads but are they doing enough to stop them? Payments service providers think not.
There are growing calls within the payments sector for other industries to do more and pay their fair share in combatting this growing menace.
While strengthening consumer protection is a welcome move, this in itself does little to stem the surge in APP fraud that has been fuelled by AI.
The Payments Association, the trade body that represents payments service providers, wants the Home Office to draw up a new shared responsibility framework that would see liability for economic crime shared more fairly among stakeholders.
Crucially it has outlined plans for liability to be based proportionality on fraud origination data and there is growing evidence that online fraud starts further upstream, on social and messaging platforms.
The association also wants Ministers to tighten Britain’s National Fraud Strategy by extending the Economic Crime Levy to both social media and telecoms companies.
The levy is a government charge imposed on more than 4,000 businesses regulated under Anti-Money Laundering laws.
Depending on their size, companies pay a flat annual fee – ranging from £10m to £1bn – to fund initiatives to combat money laundering and economic crime. From next month thousands of larger firms will face substantial increases in the fee.
Social media platforms and telecoms firms need to show they are willing to be full partners in the fight against APP fraud.
They should sign up to the Online Fraud Charter and do far more to improve fraud detection protocols and strengthen verification of online adverts.
Prevention is always better than cure.
We also need new legislation to allow for better data sharing across industries. While AI is fuelling online fraud it can also be a powerful tool to detect fraud trends and co-ordinate responses across payments, telecoms, e-commerce and law enforcement.
Emerging AI technologies, such as transaction monitoring algorithms and real-time alerts, are crucial in detecting and fighting the scourge of scam ads.
Ultimately, improving fraud prevention efforts is critical in improving real-time fraud detection.
The government, regulators, banks, social media platforms, telecommunications firms and payments service providers all have a role to play in fighting online fraud – but currently some are working harder than others to protect our money.
Lord McNicol of West Kilbride, co-chairman of the Open Finance and Payments APPG
