It appears that consumers are losing the war against financial fraud in the UK with many consumer bodies calling for banks to lead a meaningful offensive against the fraudsters.
The problem of financial fraud appears to rapidly rising with figures for the UK’s Financial Ombudsman Service (FOS) bearing this out. They have seen a huge spike in the amount of complaints they have received relating to fraud in the last financial year.
There was a 40% increase in the amount fraud-related complaints made to the FOS in the financial year of 2018/2019. This suggests that fraud and elaborate scams which seen people cheating out of their money show no signs of abating.
With so many financial transactions taking place online, the opportunities for fraudsters have never been so great and consumer bodies are calling on financial institutions to keep pace with the thieves.
The FOS received more than 12,000 complaints in the last financial year about fraud and their chief executive told the Financial Times that the complex nature of financial fraud mean that banks need to up their game to protect customers.
Caroline Wayman stated;
“Fraud and scams are becoming ever more sophisticated,”
“We know from the complaints we see that banks aren’t always treating victims of fraud fairly. They must do better.”
In a bid to address the problem, UK banks have been urged to sign up to a new anti-fraud code aimed at protecting customers. The theory is that if all banks and financial institutions are singing off the same hymn sheet in relation to tackling fraud.
The new code will have a specific focus on push payments which make up a large amount of fraud-related complaints. An authorized push payment (APP) is one in which a customer authorizes a payment to an account which they are led to believe is legitimate, but which is actually run by fraudsters.
Figures from the first half of 2018 reveal that UK consumers lost almost £150 million in fraudulent APP scams and a new group has been set up to tackle the problem and reimbursed scammed customers.
The APP Scams Steering Group is encouraging banks to sign up their Contingent Reimbursement Model in a bid to help customers who have lost money to these scams.
It is one step which banks are being urged to take to confront the scourge of financial fraud which is spiralling out of the control according to consumer groups.
Bank Transfer Scams Battle
Which? along with other consumer groups, are calling on banks to show that they are in their own customers’ corner by making a commitment to seriously tackle the growing problem of bank transfer scams.
Head of Money at Which? Gareth Shaw wrote on the consumer group’s website:
“Bank transfer fraud is spiralling out of control, with people losing life-changing sums every day and then facing a gruelling battle to get their money back from the very banks that should be preventing them from falling victim in the first place.”
A united front from banks, customers and industry bodies would send a clear message to fraudsters that they will not win the war.