Key takeaways
- In the UK, complaints of fraud and scams have increased by 43 per cent over the last year.
- Authorized push payment (APP) scams account for more than half of all complaints, with no more than half covered by a voluntary code designed to protect consumers.
- The Payment Systems Regulation introduces new rules to ensure that victims of APP scams can recover money unless they prove gross negligence.
According to the Financial Ombudsman Service (FOS), the number of complaints about fraud and scams in the UK has risen to a six-year high. The second quarter data showed a 43 percent increase in such complaints compared to the previous year. This increase in fraudulent activity has been attributed to several factors, including the proliferation of investment scams promoted through social media.
Most of these scams involve requests for payment by credit card, debit card, or online bank transfer. More than half of the complaints relate to Authorized Push Payment (APP) scams, where individuals are tricked into authorizing online bank transfers to fraudsters. About half of these cases are not covered by a voluntary code designed to protect consumers.
Fraud prevention and reimbursement
The FOS highlighted the changing methods used by fraudsters and stressed the importance of consumers reporting suspicious transactions. 49 per cent of cases were allocated by the FOS under the voluntary code.
The Payment Systems Regulation has introduced new rules to deal with delays in refunds. Under these rules, financial institutions must return money to fraud victims unless they can prove gross negligence. The provision is applicable to various APP scams with some exceptions like overseas payments.
Prevention is key
FOS provides is different Tips to prevent fraud, which also apply in Belgium: Never fall prey to phone calls asking you to transfer money to unsecured accounts; Be wary of job postings that require money; And be wary of investment opportunities advertised on social media.
If you want access to all articles, just enjoy our ad and subscribe here!