The Financial Ombudsman Service has told banks they should take into account the “evolution and sophistication” of frauds and scams – and not simply assume that their customers were “grossly negligent.”  

The plea came in the body’s latest ‘Ombudsman News’ document, which revealed there were just over 8,500 fraud and scam complaints in the last financial year, a 17% increase on the previous period.

The number, which included all types of fraud including chip and PIN disputes, cash not dispensed from ATMs, ID theft and online transfers, led to calls for fairer treatment of victims.

The ombudsman service detailed how it regularly heard from banks that consumers who had been scammed had acted with gross negligence – and therefore banks were not liable for the money their customers had lost.

However, the ombudsman service says there is “a very high bar for being grossly negligent and this is far more than just being careless.”

It said the increasing sophistication of scams, which fraudsters were using, had made it more difficult for customers to detect.

In pretending to be a consumer’s bank or other entity so they can obtain personal details, fraudsters were increasingly abusing technology to their advantage, FOS said.

Earlier this year, the ombudsman service even heard that fraudsters were contacting people and pretending to be the ombudsman – making it look authentic, as the ombudsman service’s number appeared on the Caller ID. 

 
Caroline Wayman, chief ombudsman and chief executive of the Financial Ombudsman Service, said:  “Each year we see more than 8,000 cases involving fraud and scams – everything from disputed cash withdrawals and identity theft, through to mobile phone SIM-swaps and fake banking websites.

“And where criminals are involved, both banks and their customers often tell us in strong terms that they haven’t done anything wrong.
 
“But it’s not fair to automatically call a customer grossly negligent simply because they’ve fallen for a scam.

“That’s especially true in light of the sophisticated way criminals exploit banks’ security systems – and convince customers that their money is at risk.
 
“We often remind banks that they need to support what they’re saying with facts.

“And if they can’t do that, it’s likely we’ll tell them to cover the money their customer has lost.”
 
Katy Worobec, managing director of economic crime at UK Finance, said: “Banks and building societies take the threat of fraud extremely seriously and invest millions in advanced fraud prevention systems to protect customers, stopping £2 out of every £3 of attempted fraud last year.

“But we know there is more to be done.

“Banks will always make every effort to help a customer recover any stolen funds and the industry has introduced new standards on how banks respond to scam victims.”