Fraud and scam complaints to financial ombudsman at highest level for five years

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A SURGE of more than 40 per cent in consumer complaints about fraud and scams helped push the overall number of gripes seen by the financial ombudsman to its highest levels in five years.

The Financial Ombudsman Service (FOS), which resolves cases when consumers and financial firms cannot come to an agreement, said the overall number of new complaints it saw in 2018-2019 increased by 14 per cent annually to 388,392 – despite a decrease in PPI (payment protection insurance) complaints.

Consumer complaints about fraud and scams are on the increase.

Consumer complaints about fraud and scams are on the increase.

PPI is the biggest area of dispute that the Financial Ombudsman Service (FOS) has ever seen, with a total of more than two million complaints recorded.

But for the first time in 10 years, PPI complaints made up less than half of new complaints received, accounting for 46 per cent of the total in 2018-19.

And while grievances about PPI appear to be dying down, complaints about some other products and services are on the increase.

Calls about fraud and scams increased by 43 per cent in 2018-2019, with 12,195 new complaints received. This is a record annual total for the service, which started collecting such figures in 2015-16.

Read more: Top 10 scams to be aware of.
Authorised push payment (APP) fraud – where someone is tricked into transferring money directly to a fraudster – is one of the fastest-growing types of fraud, the ombudsman said.

Chief Ombudsman Caroline Wayman said: “People manage their money in a variety of ways, and fraud and scams are becoming ever more sophisticated.”

The FOS also said it saw a “startling” 130 per cent increase in new complaints about payday loans, with nearly 40,000 new complaints brought last year.

Its report for 2018-19 also highlighted several other areas of concern. Banking and credit complaints were up eight per cent on the previous year, with 150,000 complaints brought to the ombudsman service.

The FOS said banks are not getting a handle on the impact IT failures have on consumers, with technology woes locking millions of banking customers out of their accounts last year.

There were 41,069 complaints about current accounts in 2018-19, a 27 per cent jump on the previous year.

Some 42 per cent of complaints about current accounts dealt with by the financial ombudsman last year were upheld in consumers’ favour, compared with 28 per cent of complaints generally.

Both home emergency cover and buildings insurance also saw increases in complaints.

Ms Wayman added: “Too often we see that the interests of consumers are not hard-wired into financial services. This marks a five-year high in the number of complaints that consumers have brought to us, and the behaviour we’ve seen from some businesses is simply not good enough.

“While we do see businesses responding well to customer concerns, we also see many firms who don’t. Our message is practices must improve.”

Statistics

These are the products different age groups are most likely to complain about ranked from the first to the third most likely, according to the Financial Ombudsman Service:

Under 25s; Current accounts, payday loans, car and motorcycle insurance; 25 to 34; Payday loans, Current accounts, PPI: 35 to 44; PPI, payday loans, current accounts: 45 to 54, PPI, payday loans, current accounts: 55 to 64; PPI, current accounts, credit cards, Over 65; PPI, current accounts, credit cards.

Millennials aged up to 34 are particularly likely to complain about their current accounts and about payday loans.