The Financial Ombudsman Service (FOS), the UK’s independent financial services complaints arbitrator, on Friday issued a warning to consumers after an increase of 66% in fraud and scam complaints in the first 3 months of 2021.
For much of 2020 and 2021 we have mostly been in some sort of lockdown or remote working. This has driven huge rises in online scams as crooks target the digitally vulnerable or ill-prepared/protected.
The main areas of complaint appear to be for current account fraud as well as a significant increase in unregulated crypto-currency trading.
The FOS appears to side with the consumer and blames banks in over 60% of cases for allowing ‘continuous payment authorities’ to continue even if the consumer was not aware of what they had ‘signed up’ to or been tricked into.
There should be a very simple process to stop any debit on an account. Card issuers should be able to do this immediately and indeed banks should be able to monitor so-called debits from certain accounts to track if there is a risk of fraud or unauthorised continuous payments.
That said, to blame it all on the banks is not that fair. The FOS and banking rules require Banks to reimburse clients who have lost money as part of a fraud. Why it is the Bank’s problem that a consumer signed up to an unregulated cryptocurrency fraud? There are enough warnings out there to remind us of the dangers.
Consumers need to take responsibility for their own actions and read the small print. If you have then been conned, or feel you have, bank and card issuers should have the facility to block the source immediately. If you make one payment, it is your own fault, if you suspect you have been scammed and a bank cannot block ongoing fraud then it is their problem. If you made a mistake and signed up for continuous payments unwittingly but then allow it to continue, it is your fault. Equally, if you successfully block the payments and then are taken to court for a breach of contract then it is your own problem.
As ever, be vigilant and monitor your accounts daily. Be careful to what you sign up for both online and off.