Complaints about fraud and scams have hit a six-year high, according to the Financial Ombudsman Service (FOS). So, what’s going on? Let's dive into this issue and find out why so many people are getting tricked and losing money.

What’s Behind the Spike in Complaints?

The FOS, which helps sort out disputes between consumers and financial firms, has reported a big jump in complaints about fraud and scams. From April to June 2024, consumers lodged a whopping 8,734 cases. That’s a 43% increase compared to the same period in 2023 and the highest quarterly number since the FOS began tracking this data in 2018.

So, why are scams on the rise? Here are a few reasons:

1. More Scams on Social Media: Many fraudsters are now using social media to lure people into fake investment schemes. These scams often ask people to pay with a credit or debit card, making them seem legit. But once the payment is made, the fraudster disappears with the money.
2. Complicated Money Trails: In some cases, fraudsters make victims transfer money through several banks before the cash reaches them. This makes it hard to track and recover the money, leading to more complaints.
3. More Cases Being Managed by Companies: Some companies handle fraud claims on behalf of consumers. As they take on more cases, the number of complaints about scams also goes up.

Pat Hurley, the ombudsman director for banking, explained, "Fraudsters are always coming up with new tricks, and we see this reflected in the complaints that come to us."

What Types of Scams Are Most Common?

More than half of the complaints—about 4,752 cases—were about a type of fraud called authorised push payment (APP) scams. In these scams, a victim is tricked into approving a bank transfer online, thinking they are sending money to a legitimate person or business. Instead, the money goes straight to a fraudster.

Unfortunately, 2,734 of these cases were not covered by a special voluntary code designed to protect consumers. This code generally ensures that victims are reimbursed unless there are special circumstances. Many banks follow this voluntary code, and some, like TSB, even have their own fraud refund guarantees to protect their customers.

Changes in Fraud Refund Rules

There is more news on the way. Reports say that the Payment Systems Regulator is planning to lower the maximum amount banks have to pay back to fraud victims—from £415,000 down to £85,000. This change could happen in just a few weeks, and it seems that banks have been pushing hard for this reduction.

This news comes as a bit of a surprise, given that the number of fraud cases is still rising. Many believe this decision could make it harder for victims to get back all their lost money.

“Don’t Be Afraid to Report Fraud”

Despite the growing number of scams, Abby Thomas, the chief executive and chief ombudsman of the FOS, encourages everyone to speak up if they’ve been a victim. She says, "It's disappointing to see complaint levels rising to even higher levels, but nobody should be afraid to come forward."

She also highlighted that over the past few years, the FOS has helped return more than £150 million to victims of fraud. "We’re here to help," she added.

What Can You Do to Protect Yourself?

Now that we know scams are on the rise, what can you do to protect yourself? Here are some simple steps:

• Be Skeptical of Unsolicited Offers: If someone contacts you out of the blue with a too-good-to-be-true offer, be suspicious. Don’t rush into any decisions.
• Verify Before You Trust: If you receive a call, email, or message from your bank or a company, always check directly with the official customer service line. Never use the contact information provided in the message you received.
• Use Strong Passwords and Secure Your Accounts: Make sure your passwords are unique and hard to guess. Enable two-factor authentication (2FA) whenever possible for extra protection.
• Keep an Eye on Your Bank Statements: Regularly check your bank and credit card statements for any suspicious transactions. Report anything unusual immediately.

How to Report a Scam?

If you think you’ve been scammed, report it to your bank right away. They can help stop any further transactions. You should also contact the Financial Ombudsman Service if you feel your bank hasn't handled your case properly. Remember, the sooner you act, the better your chances of getting your money back.

Final Thoughts: Stay Alert and Speak Up!

Scammers are getting smarter, and their tricks are becoming harder to spot. But by staying aware and taking precautions, you can protect yourself and your money. And if you ever fall victim to a scam, don't be afraid to report it. The FOS and other organizations are there to help you fight back and get the justice you deserve.