Warning as scam complaints hit six-year high

Disputes over fraud and scams have hit their highest level for at least six years, according to the financial ombudsman.

New figures show thousands of complaints about cases were made to the ombudsman between April and June, with nearly half upheld.

The data comes as banks warn about people being exposed to potential scams as they organise post-summer life admin.

Experts say the emotional and financial impact of becoming a scam victim is “horrendous”.

Campaigners say that some people are being exposed to scams as they fill their work and social diaries following a summer break.

Being busy and distracted can mean people are less likely to double-check messages are genuine, according to the Take Five to Stop Fraud campaign, run by banking trade body UK Finance.

So, the advice is to step back to consider requests for money or personal details before being tricked.

The Financial Ombudsman Service (FOS) deals with unresolved disputes between providers and their customers.

It said that consumers lodged 8,734 complaints in April, May and June – the highest three-month total since it started collecting comparable data in 2018.

More than half were about fraud following customer-approved online bank transfers, also known as authorised push payment (APP) scams.

Some of these cases are covered by a voluntary reimbursement code used by banks, with a mandatory scheme set to start in October.

Some victims have inadvertently paid fraudsters via debit and credit cards after spotting supposed investment opportunities on social media, the ombudsman said.

Other factors leading to the rise in cases include multiple claims when various banks are involved in the process. Professional claims management companies have also brought an increasing number of cases.

Some 44% of complaints about scams and fraud were upheld in consumers’ favour by the ombudsman, compared with 37% for other types of gripes.

Abby Thomas, chief executive and chief ombudsman of the FOS, said: “Being a victim of a fraud and scam is a horrendous experience – not just financially, but emotionally too. That’s why it’s disappointing to see complaint levels rising to even higher levels.

“We often hear from people embarrassed to have fallen victim to a fraud, but these crimes can be complex and incredibly convincing, and nobody should be afraid to come forward.”

• The Financial Conduct Authority regulates financial services in the UK
• Customers can complain about any regulated firm to the Financial Ombudsman Service, which can settle disputes and order firms to pay compensation
• Most High Street banks have signed up to the Contingent Reimbursement Model code designed to protect customers from authorised push payment (APP) scams
• The CRM will be superseded by the Mandatory Reimbursement Requirement from 7 October 2024
• Unlike the CRM, which is a voluntary code, the new regulations are obligatory
• They will cover the vast majority of UK money transfers up to £415,000, with the exception of international transfers or those involving cryptocurrencies
• Refunds will be split 50-50 between sending and receiving firms