UK’s Financial Ombudsman Sees a Surge in Fraud Complaints during Q2

The Financial Ombudsman Service (FOS) in the UK received a large number of complaints in the second quarter of 2021. The total number of new complaints reached 40,443 during the mentioned period, which is up 30% compared to the same period last year.

An alarming spike was reported in the overall number of authorized frauds. The Financial Ombudsman Service received a total of nearly 2,200 authorized fraud complaints during the second quarter of 2021. In terms of the uphold rate, the figure reached 65% and is an increase from 62% during the same period in 2020.

In authorized fraud, scammers impersonate genuine businesses, individuals and trick people. The Financial Ombudsman Service highlighted the importance of due diligence before an investment decision.

“We have continued to see a high number of complaints about fraud and scams in our casework in Q2 2021/22, and 30% more when compared to Q2 2020/21. Many of the complaints we receive about fraud relate to what is known as ‘authorized’ fraud, where a person or business is tricked into sending money to a fraudster posing as a genuine account holder. In Q2, we received around 2,200 complaints about authorized fraud, and we upheld around three quarters in consumers’ favor,” FOS mentioned.

Impact of Pandemic

FOS outlined a sharp dip in complaints about products directly related to the pandemic. Complaints about the Bounce Back Loan Scheme and Insurance dropped substantially in the latest quarter. However, a large number of complaints were received about current accounts.

“In Q2, we continued to see a decline in complaints about products directly relating to the pandemic: for example, the number of new complaints about travel insurance fell by 84% in Q2 2021/22 (397) when compared to Q2 2020/21 (2,561). Complaints about the Bounce Back Loan Scheme (BBLS) fell further this quarter, especially in the number of complaints related to the lending decisions from banks around Government-backed loans, which we understandably saw in much higher volumes in the early stages of the pandemic,” FOS added.