financial fraud

Complaints about financial fraud rose by almost a third last year. According to complaints service Resolver, the number of fraud complaints they received in 2020 was 29% higher than in 2019, reaching a total of 3,600 last year.

They are warning that these complaints about financial fraud are the tip of the iceberg and seem to be in line with other warnings that fraud cases are proliferating during the pandemic.

The research identified several worrying trends, including the opening of accounts fraudulently using fake information. Accounts like this include bank accounts and payday loans.

Another trend is money being debited from bank accounts and credit cards without authorisation.

Resolver reported complaints about fraudulent activity not being adequately addressed by businesses, leading to markers on credit reference files being placed in error.

There were also scam victims being unable to report or recall money after being ripped off by fraudsters and reporting the scams to their banks.

In the first few months of this year, Resolver has already received more than 750 complaints about fraud and financial institutions.

Despite rising levels of financial fraud, overall complaints about financial firms are in decline, falling by a third last year.

The new data also shows that 18% of complaints about financial firms were escalated to the Financial Ombudsman Service last year.

Suppose you make a complaint about a regulated financial services business and you are not satisfied with the outcome of that complaint. In that case, the Financial Ombudsman acts as an independent arbitrator of the complaint, deciding how the firm should resolve it.

While the full extent of financial fraud in the UK remains unknown, because it is widely underreported, trade body UK Finance estimates that £853 million of fraudulent transactions were attempted or succeeded in the first half of last year, via bank accounts, cheques and payment cards.

Other forms of financial fraud include hijacked shopping accounts and fake websites.

Alex Neill, CEO at Resolver, said:

“Despite campaigning for over a decade for more funding and powers to tackle scammers, fraud levels have never been higher. During the pandemic scams and frauds have flourished and people are being bombarded with text messages, phone calls or emails on a daily basis.

“While the efforts of some banks to pay back lost money is commendable, I believe the focus needs to be on actually stopping the fraud or scams happening in the first place. Enough is enough – it should be a joint priority for business and government to stop the problem at its source.”