Complaints over banking fraud surged by over 40 percent in UK

Friday 17 May 2019 11:32 CET | News

Official figures have showed UK consumers` complaints over banking fraud have surged by over 40% to hit an all-time high in the 2018-19, driven by online scams.

The Financial Ombudsman Service (FOS), which settles disputes between customers and their banks, said it received 12,195 complaints over the period, a 43% increase on the 6952 in the previous 12 months.

According to FOS, one of the fastest-growing types of fraud is authorized push payment (APP) fraud, where people unwittingly act on fraudsters’ instructions and carry out the transactions themselves. A new voluntary code of practice will come into force at the end of May designed to help victims of APP fraud get their money back more easily. Up until now, banks have been reluctant to pay out in such cases and often blame the individual.

Around GBP 354 mln was lost to APP fraud in the UK last year, up 50% from 2017. Although some lenders, like TSB, have sought to differentiate by promising to refund victims, the industry in general has been slow to react to the threat.

Another new proposal comes from the Payment Systems Regulator (PSR) and will introduce “confirmation of payee checks” to warn users when the name they enter into online bank transfers doesn’t match the sort code and account number on record. However, a July 1, 2019 deadline is now set to be pushed back to 2020.

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Keywords: banking fraud, authorized push payment fraud, APP fraud, study, report
Countries: World