EU pushes Big Tech to tackle online payment scams across social media

Irish-led proposal urges social media platforms to vet financial advertisers amid €4.3bn fraud crisis.

A phone screen displays a story about scam advertisements designed to lure victims. Photo by Jim Watson/AFP

By Alana Salsabila and Clarisa Sendy

The European Commission is under mounting pressure from member states to make Big Tech platforms accountable for online payment scams that defraud EU citizens of billions each year. With scammers exploiting social media to promote fraudulent financial ads, Ireland has taken the lead in urging Brussels to enforce tougher regulations on platforms like Google and Meta. This push, however, comes amid US President Donald Trump’s calls for the EU to ease up on regulations targeting American tech firms, adding geopolitical tension to the debate.

Ireland leads charge against scam ads

The core of the proposal centers on compelling social media platforms to verify the legitimacy of financial advertisers before allowing them to post ads. Under the current draft regulations being negotiated by EU countries, the European Commission aims to enhance protections for users by ensuring automatic reimbursement from payment services like PayPal, Visa, Mastercard, and banks when customers fall victim to online fraud.

However, Ireland’s amendment goes a step further by focusing on prevention—ensuring that only registered financial service providers can advertise on platforms. The Irish finance ministry, which submitted the amendment earlier this year, has gained significant support from fellow EU members. According to EU sources, about half of the bloc’s countries back the idea.

Speaking on the urgency of the matter, Irish MEP Regina Doherty said, “We can’t leave glaringly obvious holes in legislation that are allowing criminals to defraud people of their life savings.”

€4.3 billion in European losses

In 2022 alone, EU citizens lost an estimated €4.3 billion to sophisticated online scams, according to official figures. Many of these scams begin with deceptive ads on platforms like Facebook, Instagram, and Google Search, often mimicking legitimate investment opportunities or government programs.

These ads lead unsuspecting users to fraudulent websites or forms where they enter sensitive information. Once the data is captured, fraudsters move swiftly, often draining accounts or conducting unauthorized transactions before the ads are even flagged.

Brian Hayes, CEO of the Banking and Payments Federation Ireland, stressed the importance of preventive measures. “Once you report the fraud through social media platforms, the event has already taken place. Victims often cannot recover their money, and the same bad actors simply post new ads in a different format.”

Big Tech’s response and limits of voluntary enforcement

Google, which did not comment directly on the negotiations, emphasized its existing measures against financial fraud. The company’s Financial Services Certification programme requires financial advertisers to be licensed in the countries where their ads are shown. The initiative currently operates in 17 countries.

Meta, the parent company of Facebook and Instagram, declined to comment.

Despite these measures, EU lawmakers argue that voluntary compliance is insufficient. The Irish proposal aims to enshrine such verification requirements in law, shifting the burden of responsibility to the platforms hosting the content rather than targeting the content itself.

A note from the Irish finance ministry clarifies that “it merely requires that before an entity becomes an advertiser, the platform verifies that it is an authorised financial service provider.”

EU Commission resistance and legal hurdles

While the initiative has gained support, the European Commission has expressed concerns that the Irish amendment could conflict with the Digital Services Act (DSA)—the EU’s flagship regulation for online platforms. Under the DSA, Big Tech companies are not obliged to perform general monitoring of content, and officials worry that the Irish proposal may violate this principle.

Several EU diplomats confirmed that the Commission believes requiring platforms to verify all advertisers could equate to broad-based content monitoring, which the DSA prohibits.

Proponents of the Irish proposal reject that interpretation. “It’s not a can’t, it’s a won’t [on the part of the commission], and that’s why we’re exasperated,” said MEP Regina Doherty. She insists that the vetting process could be structured to comply with the DSA’s legal framework while still addressing the fraud problem.

Poland proposes compromise

As holder of the rotating EU Council presidency, Poland has been tasked with brokering consensus on the legislation. Rather than supporting Ireland’s call for pre-ad screening, Warsaw has suggested a softer alternative: improving communication between payment service providers and platforms. Under this plan, platforms would be required to remove or block access to fraudulent content once it is reported.

But industry experts argue this solution is insufficient. According to the Bank of Ireland, more than 75 percent of the bank’s fraud losses last year stemmed from investment scams. Most of these scams had already inflicted financial harm by the time the fraudulent content was reported and taken down.

Financial fraud ads are often designed to go viral quickly, using rapid automation and appealing visuals. They are published at scale, targeting thousands within minutes, and then removed before regulators or even platform moderators can act.

A regulatory gap with real-world consequences

The stakes are high. The European Commission is actively encouraging citizens to invest more in financial markets. But without robust protections against scams, that encouragement may backfire.

“If this happens in real life to a consumer, they will be scarred for life and most likely never want to invest,” said Brian Hayes of the Banking and Payments Federation.

Consumer trust is essential to the EU’s broader goals of financial inclusion and economic resilience. Critics argue that failing to close regulatory loopholes—especially those that enable scam ads—could have lasting effects on both.

What comes next?

Negotiations on the final text of the payment services regulation are ongoing, with fierce lobbying expected from both Big Tech and financial industry stakeholders. The Irish proposal has become a flashpoint in a broader debate about where responsibility lies in preventing digital fraud.

While Ireland and its allies push for structural reform, others in the EU remain cautious about provoking major tech companies, particularly at a time when relations with the U.S. are politically sensitive.

Nevertheless, pressure continues to mount. With financial scams costing billions and damaging public trust in both digital platforms and investment services, lawmakers are under increasing scrutiny to act decisively.

Whether the Irish plan gains final approval or gets watered down by compromise, the debate has made one thing clear: the status quo is no longer acceptable. The question now is whether Brussels will have the political will to hold Big Tech accountable in a rapidly evolving digital economy.