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Scams to drive complaints to UK's Financial Ombudsman Service

The UK's Financial Ombudsman Service is expecting more than 181,000 consumer complaints in the next year, driven in part by an increase in financial fraud and scams.

2 comments

Scams to drive complaints to UK's Financial Ombudsman Service

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Disputed transactions, driven by the increasing volume of financial fraud and scams, will be a key cause of complaints, alongside everyday issues such as unaffordable lending, travel and motor insurance.

Scam complaints have risen as authorised push payments (APP) fraud has soared in the UK, with losses totalling nearly £500 million in the last year.

In 2021, consumer group Which? reported that up to three quarters of APP fraud cases referred to the Banking Ombudsman found in favour of the customer after the banks involved initially rejected applications for reimbursement.

In October, the Payment Systems Regulator will introduce measures to improve protections for victims of APP fraud but the FOS still expects to see rising transaction disputes in the immediate future.

The service has set itself a target for the financial year of resolving 90% of cases within five months.

Abby Thomas, chief ombudsman, says: "We are planning to be more ambitious next year, resolving complaints more quickly and improving the service we offer."

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Comments: (2)

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

While I'm dismayed at the continued use of the "APP Fraud" oxymoron, I'm pleased to see a distinction being made between "Fraud" and "Scam". As Zelle makes it clear, Fraud is Unauthorozed Payment whereas Scam is Authorized Payment - they're not the same.

Mark Bish Senior Product Manager at Bottomline Technologies

The expectation that there will be an increase in the number of complaints linked to scams comes as no surprise. We saw UK Finance reporting earlier in the year that while value has reduced, the number of fraud cases related to APP has continued to grow, with close to 80% of those cases originating from online sources.

I applaud the Financial Ombudsman Service's (FOS) ambition to resolve 90% of cases in 12 months. However, it is essential to address the root cause of these scams. We need to put a stop to the complaints being made to the FOS in the first place. By doing so, we can create a more effective solution that will benefit all parties involved.

Until social media is forced to take responsibility for the scams and for refunding those who are defrauded, they have little incentive to implement the type of controls that would prevent the scams in the first place. Let's work together to create a safer online environment for everyone.

 

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