Complaints about fraud and scams, current accounts and credit cards are at record highs, according to new figures published by the Financial Ombudsman Service (FOS) today.
The service, which resolves disputes between businesses and their customers and is free for consumers, received 73,692 overall complaints between July and September 2024. In the same period in 2023/24 it reported that it received 46,716 cases.
The newly released figures reveal that fraud and scams cases have now reached their highest quarterly level, with consumers lodging 9,091 complaints in the three-month period. That’s significantly higher than the 6,264 new fraud and scam cases lodged in the same period last year. In the previous quarter (April to June 2024) there were 8,734 fraud and scams complaints.
Of the latest fraud and scams figure, 4,956 were in relation to authorised push payment (APP) scams. These are cases where consumers use an online bank transfer to inadvertently pass money to a fraudster.
Commenting on today’s figures, Abby Thomas, Chief Executive and Chief Ombudsman of the Financial Ombudsman Service, said:
“It’s concerning to see yet another rise in fraud and scams cases coming to our service. People can feel embarrassed to have fallen victim to a fraud or scam and may be reluctant to report the issue, but these crimes can be complex and incredibly convincing and nobody should be afraid to come forward.
“In recent years, as a result of our investigations into thousands of cases, more than £150m has been returned to those who have fallen victim to a scam.
“If consumers have a dispute with their bank or finance provider they can come directly to our service, if they’re unhappy with how their complaint has been handled. Getting a fair answer is free and easy.”
The rise in these complaints is partly due to the increasing complexity of the fraud and scam cases the Financial Ombudsman receives.
Multi-stage frauds, where funds pass through several banks before reaching the fraudster, are now becoming more common.
This is particularly prevalent in cryptocurrency investment scams as well as ‘safe account’ scams – where people are cold called by fraudsters posing as a trusted entity, such as their bank, and persuaded to transfer money to another account.
There are also increasing numbers of consumers submitting fraud and scam complaints about their e-money accounts. Of the 2,196 e-money cases received in total this quarter, three-quarters (1,607) related to fraud and scams. Many of these complaints involved the transferring of cryptocurrency, sometimes through multiple financial providers before reaching the fraudster.
In some of the cases seen by the Financial Ombudsman, fraudsters actively encourage potential victims to open e-money accounts so they can then access the money as part of the scam.
Pat Hurley, Ombudsman Director at the Financial Ombudsman Service said:
“Scammers’ strategies are always evolving and they’re constantly looking for new ways to defraud people.
“Increasingly, we’re seeing more multi-stage frauds, where fraudsters encourage people to move money through different banks or other payment providers for ‘investment’ opportunities including cryptocurrency. Whilst the victim is promised amazing returns, in reality it’s actually a scam.
“We also continue to see traditional scams where criminals pose as an official body, such as a bank or the police, and ask consumers to move their money to a ‘safe’ account. If you’re called out of the blue, hang up the phone.”
Across all financial products investigated by the Financial Ombudsman, the most complained about are credit cards, hire purchase (motor) and current accounts.
Credit cards and current accounts are both at an all-time quarterly high. In the three months between July and September 2024, there were 22,366 new credit card cases and 9,186 complaints about current accounts.
This is a significant rise from the same time last year when the Financial Ombudsman reported that it logged 4,505 credit card cases and 7,880 complaints about current accounts. For current accounts more customers are falling victim to fraud and scams and are also unhappy with the service their bank is providing.
Meanwhile, the vast majority of credit card cases are about perceived irresponsible and unaffordable lending. In particular, people believe financial providers should have intervened over persistently high credit balances, high credit limits or provided lower interest rates.
With both these products a large proportion of the cases are brought by professional representatives – they are now responsible for a third of current account complaints, and 85% of credit card cases. When a complaint is upheld, many of these representatives go on to charge consumers a significant percentage of any redress awarded.
The Financial Ombudsman Service has consulted on a fairer fee model which will see professional representatives charged to bring cases to its service. The organisation recently published feedback on that consultation setting out the intention to proceed with a charging regime, subject to the relevant Parliamentary and FCA approvals being given.
