Fraud complaints hit record high

Complaints regarding banks’ handling of fraud have reached a record high, with the Financial Ombudsman Service (FOS) reporting 9,091 cases from July to September, a significant increase from 6,264 in the same period last year. This surge includes 4,956 cases related to authorised push payment (APP) scams, where consumers mistakenly send money to fraudsters. In the previous quarter (April to June 2024) there were 8,734 fraud and scam complaints.

FOS recorded a 50 per cent increase in overall complaints in the third quarter of 2024 when compared with the same period a year ago. There was 73,692  complaints in Q3. In the same period in 2023/24, FOS received 46,716 complaints.

Complaints about car financing reached 11,817 in the third quarter, up from 4,622 a year earlier. Across all financial products, the most complained about are credit cards, hire purchases (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 there was 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.

Commenting on the 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. 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 we’ve seen, 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.”

FOS most complained about products:

	Q2 2024/25	Reported in Q2 2023/24
Credit cards	22,366	4,505
Hire purchase (motor)	11,817	4,622
Current accounts	9,186	7,880
Car or motorcycle insurance	3,386	4,036
Electronic money (e-money)	2,196	1,340