Financial fraud cases rise by a third

23rd April 2021

Complaints about fraud made to companies in the finance sector were up by almost a third (29%) in 2020, according to Resolver’s latest research.

The Fraud complaint figures rose by 29% to hit more than 3,600 in 2020 with the report revealing that accounts being opened fraudulently using fake identification, from bank accounts to payday loans and credit agreements. Money was also debited from bank accounts and credit cards without authorisation.

Whilst fraudulent activity not being properly addressed by businesses, resulting in markers on credit reference files being placed in error with scam victims not being able to report or recall money after being conned by fraudsters and reporting it to their bank.

Resolver has already seen more than 750 complaints about fraud and financial firms in the first few months of 2021. The rise in fraud-related complaints is concerning, given that complaints to financial service providers across the board fell by a third in 2020. Our data also shows that almost a fifth (18%) of the complaints were escalated to the Financial Ombudsman Service (FOS) last year, suggesting many firms are not resolving matters effectively or within eight weeks.

The full scale of losses to fraudsters in the UK is still not fully known as fraud remains under-reported. According to UK Finance, in the first six months of 2020 (the most recent figures available) £853 million in fraudulent transactions were attempted or succeeded – and that’s just through bank accounts, cheques and cards. This does not include hijacked shopping accounts, fake websites and other non-financial fraud.

Resolver’s CEO, Alex Neill, said “Despite campaigning for over a decade for more funding and powers to tackle scammers, fraud levels have never been higher.  During the pandemic scams and frauds have flourished and people are being bombarded with text messages, phone calls or emails on a daily basis.”

“While the efforts of some banks to pay back lost money is commendable, I believe the focus needs to be on actually stopping the fraud or scams happening in the first place. Enough is enough it should be a joint priority for business and government to stop the problem at its source.”

Holly Andrews, Managing Director of KIS Finance, said “During the pandemic, fraud levels across the UK have reached an all-time high. Scammers are preying on people’s worries and concerns surrounding Covid-19 and have been using it to their advantage for the past year.”

“The complaints received and cases actually reported to the relevant authorities is just the tip of the iceberg when it comes to financial fraud. People can often feel ashamed or embarrassed to have fallen for a scam and therefore many cases go unreported. So the fact that reported fraud figures are so high, only makes the actual figures even more worrying.”

“Banks have made big steps forward over the last couple of years in terms of helping customers who have fallen victim to fraud. The ‘APP scams voluntary code’ and the ‘confirmation of payee’ scheme have both prevented scams and helped those who have fallen victim to get their money returned.”

“However, more needs to be done to stop these scams from happening in the first place. The key to stopping financial fraud is awareness. The more people that are aware of how the most common scams work, the fewer people that will fall victim. Banks, businesses, and the government must do everything they can to educate people on how they can be targeted and how to detect a scam.”