Fraudsters employ various tactics such as authorised push payment, e-money, and cryptocurrency scams to deceive individuals into transferring funds. According to data from the Financial Ombudsman Service (FOS), the number of fraud and scam cases has surged to its highest quarterly level. In the period between July and September, the FOS received 9,091 complaints related to fraud and scams, a significant increase from the 6,264 cases reported in the same period the previous year. Out of these complaints, 4,956 cases were associated with authorised push payment (APP) scams.
APP fraud occurs when individuals are deceived into making large bank transfers to an account posing as a legitimate payee. Last year, there was a notable rise in the number of complaints related to APP scams, with losses amounting to £459.7 million. FOS Chief Executive and Chief Ombudsman Abby Thomas expressed concern over the escalating cases of fraud and scams, emphasizing the importance of reporting such incidents. The FOS has successfully facilitated the return of over £150 million to victims of scams through its investigations.
New protections for victims of APP scams were implemented in October, requiring payment service providers (PSPs) to reimburse victims of APP scams, with the cost split between sending and receiving PSPs. The regulations cover many APP scams up to £415,000, with exceptions for payments made abroad or in cases of gross negligence by the customer. However, customers who fall victim to fraud after making payments using debit or credit cards are not covered by these regulations.
The FOS noted a surge in overall complaints during the third quarter of 2024, attributing the increase to the growing complexity of fraud and scam cases. Cases involving multi-stage frauds, cryptocurrency investment scams, and “safe account” scams, among others, have been on the rise. Additionally, there has been an increase in e-money fraud cases, with consumers reporting being tricked into transferring cryptocurrency to fraudsters through multiple financial providers.
Pat Hurley, the FOS ombudsman director, highlighted the evolving strategies of scammers, including the use of multi-stage frauds and posing as trusted entities to deceive consumers into transferring money. The most complained-about financial products were credit cards, hire purchase (motor), and current accounts. Citizens Advice has urged individuals impacted by financial scams to report the incidents to their bank, card company, and Action Fraud promptly. Please rewrite this sentence.
Source link
