Fraud and scam complaints have hit their highest ever quarterly level, data by the Financial Ombudsman Service revealed.
In the first quarter of this financial year, consumers lodged 8,734 complaints about fraud and scams, with more than half relating to customer approved online bank transfers.
This is an increase compared with 2023-24 when 6,094 complaints lodged.
The Fos attributed the rise in cases to a number of factors including:
- An increasing number of multi-stage frauds which cause consumers to put in multiple claims due to the number of firms involved.
- A growth in people inadvertently using their credit or debit cards to pay fraudsters.
- More online fraud cases being brought by professional representatives.
Pat Hurley, ombudsman director for banking, said: “Fraudsters’ methods are always evolving, and we continue to see that reflected in the complaints brought to our service.
“We are currently receiving and resolving around 500 fraud and scam complaints a week. In all the cases we receive, we’ll look at the individual circumstances and investigate whether a business did everything it was required to do.
“When we do uphold complaints, we expect firms to learn from our findings and apply them to any future interactions with their customers.”
According to the Fos, many financial providers have now signed up to the voluntary contingent reimbursement model code which provides additional protection for consumers and means they are reimbursed, unless there are exceptional circumstances.
If a bank has not signed up, consumers can have less recourse for reimbursement.
Whether a bank has signed up to the code or not can affect the outcome of a consumer’s case, the Fos warned.
Of the 4,752 authorised push payment scam cases received by the ombudsman in the first three months of this financial year, 2,734 were not covered by the code.
This is reflected in the uphold rate with 49 per cent of cases that fall under the code upheld, compared to 36 per cent that did not.
Further data by the ombudsman shows a significant rise in complaints where people spot investment opportunities on social media and then pay fraudsters using their debit or credit card.
According to the Fos, there were 1,500 complaints from people who used their cards to pay for investments which turned out to be scams, compared to around 1,100 complaints in the first three months of the last financial year.
It has also seen more cases of multi-stage fraud where funds pass through several banks before reaching the fraudster which the Fos said is particularly prevalent in crypto investment scams.
alina.khan@ft.com
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