The Financial Ombudsman Service has reported a record 8,734 fraud and scam cases in just a three-month period this year, the highest ever quarterly level.

The data published today covers the first quarter of the current 2024/25 financial year, 1 April to 30 June.

In the same period in 2023/24 there were 6,094 fraud and scam complaints, over 2,600 fewer, the Ombudsman said.

There was a significant rise of over a third in investors being scammed. 

There were 1,500 complaints to the FOS from people who used their cards to pay for investments, which turned out to be scams, compared to around 1,100 complaints in the first three months of the last financial year, the Ombudsman said.

The data indicated a significant rise in complaints where people spot investment opportunities on social media and then inadvertently pay fraudsters using their debit or credit cards. Where this happens, consumers can have less protection because card payments, unlike bank transfers, are not covered by the CRM code (the Contingent Reimbursement Model Code) or the new Payment Systems Regulator rules.

The FOS also warned that financial crimes were becoming more complex and convincing – with some frauds involving multiple banks. More than half of cases related to customer-approved online bank transfers, also known as authorised push payment (APP) scams.

The Ombudsman said the rise in cases was due to a number of factors, including increasing numbers of multi-stage frauds which can see consumers put in multiple claims due to the number of firms involved. It also noted a growth in people inadvertently using their credit or debit cards to pay fraudsters.

Abby Thomas, chief executive and chief ombudsman of the Financial Ombudsman Service, said: “Being a victim of a fraud and scam is a horrendous experience – not just financially, but emotionally too. That’s why it’s disappointing to see complaint levels rising to even higher levels.  

“We often hear from people embarrassed to have fallen victim to a fraud, but these crimes can be complex and incredibly convincing, and nobody should be afraid to come forward.”

Many financial providers have now signed up to the voluntary Contingent Reimbursement Model (CRM) Code which provides additional protection for consumers, and means they are reimbursed unless there are exceptional circumstances. If a bank has not signed up, consumers can have less recourse for reimbursement.

Whether a bank has signed up to the CRM code or not can affect the outcome of a consumer’s case. Of the 4,752 APP scam cases received by the Ombudsman in the first three months of the current financial year, 2,734 were not covered by the code. That figure is reflected in the uphold rate – with 49% of cases that fall under the code upheld, compared to 36% that do not.

The introduction of upcoming rules should also speed up the time it takes to be reimbursed. These reimbursement rules, which will apply to all firms, are being brought in by the Payment Systems Regulator (PSR) and put the onus on financial providers to reimburse customers who are victims of scams unless the customer has been grossly negligent.   

The new reimbursement rules cover many APP scams up to £415,000 with some exceptions – such as the payment being made abroad.