Consumer complaints about fraud and scams soared to a record high last quarter as social media platforms face mounting calls to rein in online criminals.
The Financial Ombudsman Service (FOS), a government-backed body that settles disputes between companies and their customers, reported that consumers submitted 9,091 complaints in the three months from July to September, a 45% jump from a year earlier.
The FOS attributed the rise, in part, to the increasing complexity of the cases it has received, including multi-stage frauds, where funds pass through several banks before reaching the fraudster.
“It’s concerning to see yet another rise in fraud and scams cases coming to our service,” said Abby Thomas, chief executive of the FOS.
“People can feel embarrassed to have fallen victim to a fraud or scam and may be reluctant to report the issue, but these crimes can be complex and incredibly convincing and nobody should be afraid to come forward,” she added.
The FOS said its investigations into thousands of cases in recent years has resulted in more than £150 million being returned to victims of the scams.
Criminals managed to steal £1.17 billion from consumers in the U.K. through fraud in 2023, according to banking industry body UK Finance.
The group’s annual report, which came out in May, said banks had prevented a further £1.25 billion of unauthorized fraud through advanced security systems, but tech companies can do more to help in preventing the scams.
UK Finance pointed out that 76% of authorized push payment (APP) fraud originated from online platforms and 16% started through telecom networks.
APP fraud is the most common type of financial scam in Britain, resulting in losses of £459.7 million last year. It involves tricking victims into sending money to an account controlled by fraudsters.
New rules came into force on October 7, requiring banks to reimburse victims of APP fraud with compensation of up to £85,000. Previously, many banks had signed up to a voluntary reimbursement code.
Although financial institutions are covered by the new rule, social media companies and telecoms firms are not, and they have been the primary sources of APP fraud.
“These platforms share no responsibility in reimbursing victims, and so they have no incentive to do anything about it,” Revolut’s head of financial crime, Woody Malouf, said last month.
The fintech giant pointed out that social media platforms enable fraud to take place, and Meta’s platforms—Facebook, WhatsApp and Telegram—accounted for 62% of all scams reported to Revolut in the first half of 2024.
Despite the growing calls to make tech companies liable for compensation to victims, the government has only asked them to join a voluntary online fraud charter, which stipulates that they promise to take steps to block fraudulent material, protect people from fake adverts and share information about frauds.
