Social Media Giants Urged to Step Up Fight Against AI-Fuelled Scam Ads
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, according to Lord McNicol. With roughly three-quarters of UK scams originating online, the issue has become a critical concern for digital safety.
The Rise of AI-Driven Scam Ads
Online shopping offers convenience but also significant risks. The advent of artificial intelligence has led to an explosion in fake advertising, with the UK emerging as a prime target for fraudsters. Scam ads utilize AI tools to impersonate trusted brands and exploit social media algorithms, often appearing at the top of search results. These deceptive promotions offer fake products in high demand or phoney services, aiming to steal money, financial information, or login credentials.
Platforms such as X, Facebook, and Instagram are inundated with scam ads. Many consumers admit to not verifying the authenticity of advertisements before making purchases or sharing sensitive data. This crime, known as Authorised Push Payment fraud, involves victims being conned into voluntarily handing over funds or bank details.
Alarming Statistics and Financial Impact
It is estimated that every online shopper encounters approximately 185 scam ads per month. In 2025, the UK saw around 95 billion scam ad impressions, a figure projected to surge to 137 billion by 2030. While strengthened consumer protection laws have ensured that shoppers are rarely left out of pocket—with payment service providers reimbursing 87% of scam-related losses since October 2024—the financial burden on these providers is substantial.
According to Juniper Research, UK shoppers lost £44 million to fake ad scams in 2025, with losses expected to double to £84 million by 2030. Meanwhile, social media platforms generated an estimated £3.8 billion in revenue from scam ads in 2025, accounting for roughly ten percent of all social media ad revenue. Advertising on social media is forecast to grow by 120% over the next five years, reaching a value of £84 billion by 2030.
Calls for Greater Accountability and Action
There is growing criticism that social media giants are profiting from scam ads without doing enough to prevent them. The Payments Association, representing payment service providers, advocates for a new shared responsibility framework from the Home Office. This framework would distribute liability for economic crime more equitably among stakeholders, based on fraud origination data, with evidence suggesting that online fraud often originates on social and messaging platforms.
The association also urges ministers to tighten the UK's National Fraud Strategy by extending the Economic Crime Levy to include social media and telecoms companies. Currently imposed on over 4,000 businesses under Anti-Money Laundering laws, this levy requires companies to pay annual fees ranging from £10 million to £1 billion to fund anti-fraud initiatives. From next month, larger firms will face significant fee increases.
Preventive Measures and Legislative Needs
Social media platforms and telecoms firms are called upon to become full partners in the fight against APP fraud. They should sign the Online Fraud Charter and enhance fraud detection protocols and advert verification processes. Prevention is emphasized as superior to cure, necessitating new legislation to facilitate better data sharing across industries.
While AI fuels online fraud, it also holds potential as a powerful tool for detecting fraud trends and coordinating responses across payments, telecoms, e-commerce, and law enforcement. Emerging technologies like transaction monitoring algorithms and real-time alerts are crucial in combating scam ads. Ultimately, improving fraud prevention efforts is vital for enhancing real-time fraud detection.
The government, regulators, banks, social media platforms, telecommunications firms, and payment service providers all have roles to play in fighting online fraud. However, current efforts are uneven, with some stakeholders working harder than others to protect consumers' money. Lord McNicol of West Kilbride, co-chairman of the Open Finance and Payments APPG, stresses the urgency of collective action to address this escalating threat.
