The UK's scams and fraud epidemic

Customer complaints about fraud and scams have reached new highs. From April to June, there were 8,734 complaints, up from 6,094 from the same period last year. It is the highest total since the service began tracking the data in 2018.

Nearly half the claims – 44% – were upheld by the Financial Ombudsman Service, which "deals with unresolved disputes between providers and their customers", said the BBC, compared with 37% for "other types of gripes".

Abby Thomas, chief executive of the ombudsman service, said: "Being a victim of a fraud and scam is a horrendous experience, not just financially, but emotionally, too. That's why it's disappointing to see complaint levels rising to even higher levels."

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

How are people being scammed?

More than half the complaints were about authorised push payment (APP) frauds – when customers are "tricked into approving an online bank transfer to a fraudster", Sky News said. According to the Financial Times, £459.7 million was lost through this in 2023.

It is, said financial news site Finextra, an "increasingly sophisticated financial crime", in which the victim is hoodwinked "through various technological and practical methods". One of the most well-known APP scams is impersonation, where fraudsters pretend to be the police, a family member or a legitimate organisation such as a bank or HM Revenue & Customs, "and attempt to convince the victim that money must be sent". 

Other methods used include getting victims to pay for goods or services that don't exist, such as the Taylor Swift fans who were conned an average of £322 each for non-existent tour tickets. Facebook was the platform used for 90% of those sales, Finextra said.    

"Less discussed" are the romance scams, when the con artist strikes up a "feigned emotional bond" with their victim before asking for money. A survey by Nationwide Building Society earlier this year found more men were complaining of being targeted, too, said The Independent, with numbers up 40% between 2022 and 2023.

Can scam victims get their money back?

At present, there is no requirement for banks and financial providers to refund customers hit by APP scams, although many banks do so "voluntarily", said the BBC, while others are "more reluctant".

Of the 4,752 APP complaints received by the ombudsman from April to June, 2,734 were not covered by the code, leaving those customers with less chance of getting their money back, said FT Adviser.

Plans had been introduced last year to make such reimbursements mandatory, said The Guardian. Victims had been able to claim back up to £415,000 in a new scheme from the Payment Systems Regulator beginning on 7 October this year.

However, the FT reported that the regulator was set to "dramatically scale back" the scheme to only £85,000 "after strong pressure from ministers and fintech firms". Industry lobbyists had argued the compensation scheme could be exploited by criminals and endanger small financial technology firms, and Treasury insiders had called it a "disaster waiting to happen". The lower threshold matches the maximum sum protected under the financial services compensation scheme, which protects customers if a bank goes under.

How can you avoid being scammed?

The BBC warned there was a risk of more people being hit as they organised their "post-summer life admin". Citing the Take Five to Stop Fraud campaign, it said consumers were less likely to double-check if a message was genuine among the distraction of returning to work and making plans in their diaries.

"The advice is to step back to consider requests for money or personal details before being tricked," it said.

There were "other factors" leading to the rise in complaints to the ombudsman too. Multiple claims have been made where consumers are victims of "multi-stage frauds", which involve a number of firms. There has also been an "increasing number" of cases brought by professional claims companies.