The latest data from the Financial Ombudsman Service show a dramatic increase in the numbers of complaints relating to scams and frauds. The FOS received 5,025 complaints about these issues during the first quarter of the 2021/22 financial year (April 1 to June 30 2021), which represents a 66% increase when compared to Q1 2020/21.

The uphold rate for the scams and fraud cases closed by FOS has also risen from 50% in Q1 2020/21 to 60% in the latest three-month period.

The Service highlighted two particular types of fraud complaint, as it released its latest data:

  • Consumers saying that they were contacted by someone claiming to be from their bank, who told them to transfer their money to another account for supposed security reasons
  • Consumers who paid for goods via bank transfer, but who then never received anything in return, or received poor quality goods

Financial Ombudsman Service Interim Chief Executive and Chief Ombudsman Nausicaa Delfas said:

“It’s a real concern that we are seeing such an increase in scams. It’s vital that people take extra care with their finances, as unfortunately fraudsters are becoming increasingly sophisticated.  If people feel they have not been treated fairly by their banks, we are here to help.”

Current accounts have become the UK’s most complained about product for the first time, with complaints about this product up by 55% over 12 months – 6,911 complaints about this product were received in the first quarter.

While guarantor loans are no longer the most complained about financial product, consumer credit cases at FOS remain high. Where there have been falls in the numbers, FOS suggests that this might have more to do with some of the largest firms entering schemes of arrangement rather than any improvement in the firms’ practices – typically once a firm has entered a scheme of arrangement, FOS is unable to progress any complaints about them.

Other products with high numbers of complaints in Q1 included:

  • Credit cards (4,039)
  • Personal loans (1,983)
  • Motor hire purchase (1,807)
  • E-money (1,765)
  • First charge repayment mortgages (1,522)
  • Home credit (1,414)

The product with the highest uphold rate in Q1 2021/22 was logbook loans, at 71%, with most of these complaints concerning unaffordable lending. Other high uphold rates included:

  • Non-motor point of sale loans (68%)
  • Home Credit (67%)
  • Hire purchase (47%, 56% and 60% for different types of HP arrangement)
  • Running account credit (58%)
  • Guarantor loans (56%)
  • Instalment loans (56%)
  • Payday loans (49%)
  • Conditional sale relating to cars (47%)
  • Catalogue shopping (45%)
  • Current accounts (44%)
  • Personal loans (42%)
  • Pension transfers (40%)

The uphold rate for all products was 35%.

September 2021 also saw FOS release its complaints data for individual firms for the period January to June 2021. In these data, the firms with the most complaints, apart from the big high street names, included:

  • A home credit provider (10,983)
  • A guarantor lender (4,386)
  • A short-term loan provider (1,585)
  • A payday lender (1,252)
  • A car finance provider (1,159)

The highest uphold rates were for:

  • A financial adviser (92%)
  • An electronics retailer (88%)
  • A guarantor lender (85%)
  • Two home credit firms (both 84%)
  • A mobile phone provider (79%)
  • A large home insurer (76%)
  • A short-term lender (75%)
  • Another home credit firm (74%)
  • A small insurer (72%)
  • A car finance provider (72%)
  • A short-term loan provider (71%)
  • A payday lender (70%)