The Financial Ombudsman Service received 21,918 fraud and scam complaints in the 2022/23 financial year.
This was up by almost a fifth (18 per cent) when compared to the 18,450 complaints it received in 2021/22.
Of these, 10,985 were about authorised push payment (APP) scams which was a 17 per cent increase from the 9,370 APP scam complaints received in 2021 to 2022.
In the last financial year, the Fos said it saw a higher proportion of complex scam complaints.
Over a third of the APP scam complaints were about investment scams, up from a quarter in 2021 to 2022.
The majority of these complaints included an element of cryptocurrency.
Pat Hurley, ombudsman director at the Fos, said: “Fraud is not just a financial crime – it can have a profound emotional impact too. We continue to receive hundreds of complaints a week from victims of fraud and scams.”
The Fos said it is now seeing increasing numbers of complaints which contain the features of more than one scam, labelled as ‘hybrid’ scams.
These are now common in romance scams, purchase scams, and ‘safe account’ scams.
- Romance scams - Fraudsters meet their victim on a dating website and eventually the victim believes they’re in a relationship with them. The fraudster then persuades them they’re an expert in cryptocurrency trading. Due to the trust the victim has in the fraudster, and given their belief they’re in a relationship, they tend to follow the fraudster’s advice to invest in cryptocurrency which doesn’t exist.
- Buying goods that don’t exist - Victims will attempt to make a bank transfer to purchase goods they’ve seen online – which don’t actually exist – and the fraudster tells them the payment is unsuccessful. After receiving this information, the victim will receive either a text or phone call from a fraudster impersonating their bank and the victim often makes multiple payments to the fraudster because someone pretending to be their bank is telling them that their payments aren’t going through.
- ‘Safe account’ scams - Fraudsters impersonate reputable companies such as the customer’s bank or the FCA and tell their victims to move money to cryptocurrency accounts for safe keeping.
Hurley said: “We are beginning to see more hybrid scams compared to a year ago.
“Fraudsters are always trying to stay ahead of the game by evolving their methods of scamming consumers and people should be extra vigilant.”
The evolution and increase of ‘hybrid’ scams makes it more important that banks’ fraud prevention measures and warnings take account of the latest tactics by fraudsters and the risks, the Fos said.
The uphold rate for fraud continues to remain higher than the Fos’s average for all financial products and services, which is 35 per cent.
The uphold rate for all fraud and scams, including APP scams, chip and pin fraud, ID theft and disputed transactions, is 45 per cent, while for APP scams it is higher at 54 per cent.
The ombudsman splits APP scams into two categories – those impacted by the contingent reimbursement model (CRM), the voluntary code that some banking groups have signed up to, and those that aren’t impacted by the CRM.
The Fos said it is now receiving more complaints where the financial provider has not signed up to the CRM.
This is likely due to banks who have signed up to the CRM having better fraud prevention measures in place, as well as higher reimbursement rates for their customers.
William Christopher, civil fraud partner at law firm Kingsley Napley, said these figures resonate with the firm’s own experience.
“Often the scams are simply classic investment scams, with a crypto badge, whereby victims are attracted by the promise of large returns,” he said.
“These are often on online platforms which purport to have generated huge (but fictional) profits for the investor, and when the victim asks to withdraw the profits made, they are then faced with an advance fee fraud, namely the need to pay some kind of fee, for example for tax, before the funds can be released. In reality, no profits have been generated at all, and the original investment has simply been stolen, as will the advance fee if paid.
