FOS reveals the tactics behind scams and fraud

Hacker in a hood on dark blue digital background

The Financial Ombudsman Service has set out the scale of fraud carried out in the financial services sector with £6m lost to scams in just three months.

In its latest newsletter, the FOS says scammers are getting customers to reveal their financial information by pretending to be from the ombudsman, with this tactic used in several cases.

The FOS cites Citizens Advice statistics that show £5.9m was stolen between October and December with an average of £2,620 lost per victim. The most money lost to a single scam was £300,000.

The FOS warns technology intended to make financial services easier for customers is being increasingly compromised by scammers.

It cites a 2015 Opinium survey that shows 63 per cent of people in the UK had received a suspicious call over a 12-month period and that 7 per cent of the UK population were victims of phone fraud between 2010 and 2015.

Telephone scams accounted for 44 per cent of cons reported to the Citizens Advice consumer service while online scams made up 33 per cent of those reported. Mail and doorstep scams were 11 per cent and 8 per cent of scams reported to the service, respectively.

In one FOS case study, a woman’s email was hacked which led to her adviser withdrawing £250,000 from an investment bond. The woman recovered £170,000 from the police and the adviser was ordered to repay the rest for failing to take better care of the client’s money.

According to the FCA, the regulator returned £1.9m to fraud victims in 2015 after FCA action. It received 8,500 reports last year about potential unauthorised activity.

FOS chief executive Caroline Wayman says: “From our conversations with financial businesses, we know that protecting customers is high on their agenda.

“It makes sense that part 
of the solution will be ensuring that technology and other safeguards keep one step ahead of the scammers.”