Warning over 'dramatic' spike in UK scams amid crypto fraud

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Warning over 'dramatic' spike in UK scams amid crypto fraud

The UK's Financial Ombudsman Service saw a dramatic 66% rise in fraud and scams complaints in the first quarter of the 2021/22 financial year, from 5,025 cases to 3,028 year-on-year.

Over that period, 60% of fraud and scam complaints were upheld by the ombudsman, compared with 50% the previous year, it revealed in a statement on 24 September.

It highlighted that banks and other financial institutions "still need to do more to resolve complaints from their customers fairly before people are forced to seek help from the Financial Ombudsman Service".

It’s a real concern that we are seeing such an increase in scams."

Fraud and scam complaints continue to be one of the main drivers of complaints to the Financial Ombudsman Service, including problems caused by fraudsters posing as a customer's bank and convincing them to move their money to a fake ‘safe account' and consumers being scammed by paying for goods via a bank transfer but not subsequently receiving what they paid for.

Financial Ombudsman Service interim chief executive and chief ombudsman Nausicaa Delfas said: "It's a real concern that we are seeing such an increase in scams. It's vital that people take extra care with their finances, as unfortunately fraudsters are becoming increasingly sophisticated. If people feel they have not been treated fairly by their banks, we are here to help."

The Ombudsman Service said it also saw an increase in complaints about cryptocurrencies during the pandemic.

"While cryptocurrencies are unregulated investments, the Ombudsman Service can look into complaints about the banking providers who refuse to reimburse consumers who feel they've been a victim of a cryptocurrency fraud or scam.

Anecdotal evidence suggests the increase in complaints about cryptocurrency complaints could be in part driven by social media-based scams, with young people wanting to make extra cash while furloughed, while others were simply spending more time on social media."

Overall, the Ombudsman Service received 50,906 complaints about financial businesses in the first three months of the financial year.

For the first time in over a decade, current accounts were the most complained about product, with consumers bringing 6,911 complaints to the service. This is an increase of 55% when compared to the same period last year, when the ombudsman service received 4,466 complaints about current accounts.

Fraud and scams accounted for around half of the current account complaints that the service received in the first three months of this financial year.

Credit cards (4,039 complaints received in April-June 2021) and car/motorcycle insurance (2,427 complaints received in April-June 2021) were the other products where the service saw the highest number of complaints.