Rise in fraud complaints to finance businesses during 2020

Fraud-related cases or complaints raised through Resolver towards companies in the finance sector were up by almost a third in 2020, according to our latest research.

Resolver has seen fraud cases in the finance sector rise by 29% to hit more than 3,600 in 2020. Common problems faced by customers last year included:

Accounts being opened fraudulently in their name: “I have been sent an email today about a payday loan I haven’t taken out”.
Unknown transactions leaving accounts: “It was taken money from my account without my knowledge.I couldn’t get connection on fraud helpline.”
Negative impacts on credit scores as a result of fraud: “This account has appeared on my credit file which I have no knowledge of. I have been the victim of ID fraud. I have cifas reports on my file which don’t seem to have helped.”; and
Being victims of scams – with more than 400 complaints referencing a scam-related issue: “I was a victim of a fraudulent telephone call which resulted in my life savings being taken. I have informed the bank’s fraud department.”

And despite not even yet seeing out the first third of 2021, Resolver has already seen more than 750 cases of customers complaining to their finance provider about fraud-related issues.

The rise in fraud related complaints is concerning, given that complaints to financial service providers across the board fell by a third in 2020. Our data also shows that almost a fifth (18%) of the complaints were escalated to the Financial Ombudsman Service (FOS) last year.

See why Resolver CEO Alex Neill is concerned about fraud and scams

Where were the fraud cases?

Almost every service within the finance sector saw a rise in fraud cases last year, but for ‘payment services’ providers (e-payments or those using mobile devices) this increase stood at 62% to hit 1,200. For ‘buy now, pay later’ credit there was a rise of 57%, while complaints to credit card providers were up by a third compared to 2019.

Current accounts saw a smaller increase in the number of fraud-related complaints, while complaints for payday loans tipped below 100 last year. But current accounts and payment services providers took the lion’s share of fraud-related complaints during 2020, accounting for 70% of cases Resolver saw.

Protect yourself from fraud: our tips

Click the links below to find out how you can protect yourself from fraud in the future

Beware the scams

Sadly scams, particularly those that involve you being contacted by a fraudster pretending to be a service provider, such as your bank, mobile phone service or even a government department remain ever-common and can be very hard to spot. Vigilance is key – don’t click on any links in emails or texts that may seem even the slightest bit suspicious, and if there is any doubt as to whether a message you receive is genuine, phone your provider on their direct contact details to check. Our handy guide to the latest scams will help you spot the latest tricks out there to get hold of your details – or your cash.

Block those texts or numbers

If you believe a call or text is from a fraudulent number, and your mobile phone has a blocking function, then block the number directly. Some phones have SPAM reporting functionality that you can use to automatically forward to your provider. You can also quickly report any scam text messages for free by forwarding to 7726 which enables your mobile provider to investigate.

Keep an eye on your credit score and credit report

Keeping a regular check on the state of your credit report will help you spot if anything suspicious has occurred, such as large transactions that you didn’t make on your credit card, or accounts that have been opened in your name. You can check your credit score for free on a number of apps including MoneySuperMarket’s Credit Monitor.

Eyeball your bank or credit card statements

If you’re using the internet, ensure you have the latest antivirus software on all of your devices and be sure not to click on pop-ups.

Make sure your antivirus software is up to date

Energy suppliers cannot ban you from switching to another provider, but your attempt to switch could be rejected. This is commonly down to incorrect information in either national databases or relating to your circumstances such as your address, and can be fixed. If you have been told why your switch has been rejected but are unsure what to do next, our guide can help.

Shred any paper documents that you are throwing out

It’s not the most exciting way to spend your time but shredding any paperwork before you put it in the bin will add a deterrent to people searching for your details.

Satisfaction for fraud complaints

Encouragingly, Resolver’s data shows an overall rise in satisfaction levels from customers in terms of how fraud complaints had been handled during 2020, though this stood at a mediocre 5/10 on average.

There was a marginal increase in the ease of complaining to finance businesses about fraud related issues and the sector also saw a rise in the resolution rate in 2020 for fraud cases, partly attributed to the introduction of a new code in mid-2019 to protect consumers who have fallen victim to automatic push payment fraud and make it easier for them to get their money back.

However, some customers were reporting rude staff and inability to contact providers owing to ‘emergency’ fraud lines being closed. There were also incidences of fraudulent transactions not being refunded, and delays in contact – with one customer reporting that they had not received a reply from their provider after three months, despite being told they would be contacted within 20 days. Meanwhile, other customers were reporting that they were still receiving account statements or requests for payments for accounts they had not opened despite contacting the companies concerned.

Have you been affected by fraudulent activity or a scam? Have you narrowly avoided being caught out? We want to hear from you – contact contributions@resolvergroup.com to share your story or if you have cause to raise a case, visit www.resolver.co.uk and make a complaint for free.