The Financial Ombudsman has reported a surge in fraud and scam complaints at their highest level in six years. During April to June, the Ombudsman saw thousands of customers inform them of their grievances, with almost half ending up being valid. At the same time, banks are highlighting the potential exposure to scams for people trying to transition into post-summer administration. It’s important to note that the impact of scamming on victims’ finances and emotions is “horrendous.”
The Take Five to Stop Fraud campaign, administered by UK Finance, encourages people to be cautious due to the increased risk of being scammed when busy or distracted. They caution consumers to think twice before offering money or personal information. An APP scam, in which fraud occurs after online bank transfers approved by the customer, accounts for more than half of the complaints. Banks have implemented a voluntary reimbursement code, with a mandatory program scheduled for October.
The Ombudsman reports that some victims mistakenly paid fraudsters via debit and credit cards after spotting ‘investment’ opportunities on social media. Additionally, the use of professional claim management companies, along with cases involving multiple banks, has led to a rise in reports. 44% of fraud and scam complaints were upheld in the complainants’ best interests by the ombudsman.
FOS Chief Executive Abby Thomas stated that being scammed was devastating financially and emotionally; it disappoints her for levels of complaints to see a further rise. It’s common for victims to feel embarrassed about their situation, but they should not be afraid to come forward. It’s important to remember that these crimes can be incredibly convincing and complex.
Customers can address complaints about any regulated firm to the Financial Ombudsman, which settles disputes and directs businesses to compensate. The vast majority of UK money transfers up to £415,000, with the exception of international transfers or those involving cryptocurrencies, will be covered by new regulations starting October 7th, 2024. The Mandatory Reimbursement Requirement, unlike the voluntary Code of Contingent Reimbursement Model, is obligatory
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