Reports of digitally enabled financial fraud and scams in the UK have reached an unprecedented high, with consumers submitting 8,734 complaints in just three months. More than half of these complaints involved customer-authorized online bank transfers, commonly referred to as authorized push payment (APP) scams, according to data from the Financial Ombudsman Service (FOS).
This data, covering the period from April 1 to June 30, shows a significant increase from the 6,094 complaints recorded during the same period last year. The actual figures may be even higher due to considerable underreporting, as many victims may feel embarrassed or ashamed to reveal they were scammed.
Several factors contribute to this rise, including increasingly sophisticated multi-stage fraud schemes, which can provide multiple claims from single victims due to the number of institutions involved. There has also been a rise in individuals unwittingly using credit or debit cards to pay fraudsters, along with a growing number of complaints being filed by professional representatives on behalf of victims.
Abby Thomas, chief executive and chief ombudsman of the FOS, stated, “Experiencing fraud is a traumatic ordeal, both financially and emotionally. It’s troubling to see complaint numbers climbing to new heights. We frequently hear from individuals embarrassed about falling prey to scams, but these crimes are often complex and highly convincing, and no one should feel ashamed to report it.”
Over recent years, the FOS has returned over £150 million to victims across thousands of cases. Thomas emphasized, “No matter how complicated a case is, people can approach our free, independent service with confidence, and we will thoroughly investigate their complaint.”
The FOS pointed out the increasing implementation of the Contingent Reimbursement Model (CRM) code among some banks, noting that whether a bank participates in the code can significantly affect victims’ chances of retrieving their money. Of the 4,752 APP scam cases reviewed in the three-month period, 2,734 fell outside the code’s protection. This disparity was evident in the uphold rates: 49% of cases under the CRM code were upheld, compared to only 36% of those that were not.
Although a number of banks are enhancing their fraud detection capabilities, the FOS reported a relatively high uphold rate: 44% of fraud and scam complaints from April to June were upheld, compared to 37% across all product complaints. Additionally, new reimbursement regulations from the Payment Systems Regulator (PSR), which will require banks to reimburse customers unless gross negligence is proven, are expected to expedite the resolution of fraud cases in the future.
Current Trends in Digital Fraud
The FOS highlighted a notable rise in complaints stemming from investment opportunities discovered on social media, with victims—numbering around 1,500 from April to June—often losing protection since card payments lack coverage under the CRM code. Complaints regarding multi-stage frauds have also surged, particularly concerning scams involving cryptocurrencies or ‘safe accounts,’ wherein victims are contacted by fraudsters impersonating trusted parties and persuaded to transfer funds to other accounts.
The Role of Mobile Technology
As fraud increasingly incorporates digital elements, Jacob Kerr, director of the mobile software security firm Appdome, stressed that mobile banking and social media platforms are prime targets for scammers employing social engineering techniques to ensnare unsuspecting victims.
“Stronger measures are essential to address these mounting threats. Mobile brands must integrate robust security and anti-fraud protocols into their applications,” Kerr remarked. “For these protections to be effective, they should be automated and operational in real-time, rather than merely reactive. This proactive approach enables organizations to continuously detect, block, and counteract social engineering attacks aimed at exploiting user trust.”
Kerr further noted that nearly all of 25,000 mobile consumers recently surveyed by Appdome (99.5%) demand comprehensive security measures within mobile applications and expect developers to take responsibility for their safety.
“By prioritizing mobile app security and fraud prevention, organizations can not only comply with regulatory standards but also enhance customer safety and loyalty,” he concluded.