Highest Level of Fraud & Scam Complaints Recorded

FOS stated that scams are becoming more “complex” and “convincing” with fraudsters using multiple banks as part of their intricate scamming tactics.

The rise in recorded cases is due to several factors including:

• Increasing numbers of multi-stage frauds can 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.
• Professional representatives are bringing more online fraud cases.

Abby Thomas, Chief Executive and Chief Ombudsman of the Financial Ombudsman Service, 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 fraud, but these crimes can be complex and incredibly convincing, and nobody should be afraid to come forward.

“In recent years, we have investigated thousands of cases, returning more than £150m to those who have fallen victim to these crimes.”

New rules from October 2024 aim to help speed up the time it takes to be refunded from a scam. The rules, implemented by the Payments Systems Regulator (PSR), mean financial providers must reimburse customers of scams unless the customer has been grossly negligent.

FOS data also revealed a rise in complaints about investment opportunities promoted on social media, where victims pay scammers using debit and credit cards. 1,500 complaints were made for this type of scam, compared to 1,100 in the same quarter of the previous year. Unfortunately, when this type of fraud happens, there is less protection for consumers because card payments are not covered by the new PSR rules.

Multi-stage fraud is another type of scam on the rise, in which money sent from the victim is passed through multiple banks before it reaches the fraudster. This is particularly common in cryptocurrency scams and safe account scams. In safe account scams, fraudsters cold-call victims and pretend to be a trusted source, such as their bank, to transfer money to another account.

TLW Solicitors is currently handling a large number of cases for clients involving scams, financial institutions, and the Financial Ombudsman Service.

You can reduce the risks of falling victim to a scam by taking the following steps:

• Do your research and get professional, independent advice. Speak to someone, such as family or friends, before you decide to invest in ‘too good to be true’ opportunities – they usually are!
• Always avoid unsolicited, cold calls, emails, texts, and social media adverts.
• Check the FCA register to ensure that City Watchdog, the Financial Conduct Authority (FCA) regulates the company or individual that you are dealing with. The FCA regulates financial services firms in the UK, and if you invest in a non-regulated company, you may not be covered by the protections of FOS.
• A trusted entity like your bank will never ring or message its customers to move money to a ‘safe’ account. Contact your bank urgently if you receive a call or message like this.
• If you are applying for an employment opportunity and are asked to send money upfront, again, this is more than likely a scam!
• Don’t be pressured into anything. Legitimate, regulated financial companies will not pressure you to do anything!

If you have been scammed, it is important that you hang up on any further calls from scammers and immediately report the fraud to your bank, police, and Action Fraud, the National Fraud and Cyber Crime Reporting Centre, which may start a criminal investigation.

Your bank will initially investigate the case, and you may be entitled to a refund, but if the money has been moved, it might not be possible. If banks haven’t taken the proper steps to protect their customers from fraud, they may be found liable for the loss.

If you have lost money through a push payment scam and your bank is unwilling to refund you, you can take this further with the Financial Ombudsman Service.

Sarah Spruce, Legal Director and Head of the investment scams and APP fraud team at TLW Solicitors commented on the data reported by FOS:

“This new data shows how sophisticated scams are becoming and how easy it is to fall victim to one. The rise in figures is concerning and I would reiterate what the Chief Executive, Abby Thomas has said.

“These frauds are becoming far more sophisticated, and it is important not to feel embarrassed or ashamed if you have been scammed, so don’t be afraid to come forward and reclaim what you may be rightfully owed.

“As these stats clearly demonstrate, you are not alone, and specialist help is available. Contact my team for a no-obligation discussion to explore your options and whether you are eligible to make a ‘no win, no fee’ refund claim.”