- Don’t move money to a “safe account” if asked.
- Avoid paying for job offers.
- Verify social media investments are FCA-regulated.
Complaints regarding fraud and scams have surged to a six-year high, with 50% of these issues related to bank transfers, according to the Financial Ombudsman Service (FOS).
The FOS, which handles disputes between consumers and financial institutions, reported receiving 8,734 complaints in the period from April 1 to June 30. This marks a significant increase in consumer concerns over financial fraud.
The number of complaints about fraud and scams has risen by 43% compared to the same period in 2023, reaching the highest levels since the Financial Ombudsman Service (FOS) began tracking data in 2018.
The FOS attributed the increase to several factors, including a rise in investment scams on social media where fraudsters demand payments via credit or debit cards, multiple claims from consumers as funds traverse various banks before reaching the fraudster, and an increase in online fraud cases managed by claims companies.
Pat Hurley, the ombudsman director for banking, noted, “Fraudsters’ methods are always evolving, and we continue to see that reflected in the complaints brought to our service.”
Over half of the fraud and scam complaints, totaling 4,752, were related to authorised push payment (APP) scams. In these cases, customers are deceived into authorizing an online bank transfer to a fraudster.
Among these complaints, 2,734 cases were not covered by a voluntary code that offers additional consumer protection and guarantees reimbursement unless exceptional circumstances apply. While many banks adhere to this code, some, like TSB, provide their own fraud refund guarantees.
The Financial Ombudsman Service (FOS) upheld about 49% of cases covered by the code. Abby Thomas, chief executive and chief ombudsman of the FOS, expressed disappointment at the rising complaint levels and stressed that “no one should be afraid to come forward.” She added that the FOS has recovered over £150 million for victims in recent years.
The Financial Ombudsman Service (FOS) announced that new regulations are being introduced to expedite reimbursements for fraud and scam victims.
The Payment Systems Regulator (PSR) is implementing this scheme, which mandates that all financial companies must reimburse customers who fall victim to scams, provided the customer has not been grossly negligent.
The new rules will cover many authorised push payment (APP) scams involving amounts up to £415,000, though there are exceptions, such as payments made internationally.
The Financial Ombudsman Service (FOS) has shared tips to help prevent falling victim to fraud:
- Banks or the police will never call you to ask for your money to be moved to a “safe account.” If you receive such a call, hang up and contact your bank directly.
- Be cautious about paying money for job opportunities; this is often a scam.
- Investments promoted on social media may be fraudulent. Verify that the company is regulated by the Financial Conduct Authority.
