The Financial Ombudsman Service, which manages disputes between financial firms and customers, is ruling against banks in 73% of authorised fraud cases, data exclusively obtained by Which? demonstrates. This means if you have been tricked into sending money to a scammer, you may be able to get a refund from your bank.

The biggest banks are signed up to the voluntary Contingent Reimbursement Model (CRM) Code, which is designed so victims of authorised push payment fraud (APP) are treated fairly and consistently when they ask for compensation. If your bank refuses compensation, you can escalate your case to the Financial Ombudsman Service (FOS).

But the number of customer complaints about banks’ handling of authorised fraud – the vast majority of which are APP – landing at the FOS more than doubled in the 2020-21 financial year, from 3,600 to 7,770. And three-quarters (73%) of these were upheld in favour of the customer.

Financial Scams and fraud


APP fraud – being tricked into transferring money to a fraudster – is fast becoming one of the UK’s biggest frauds. Losses hit £355.3m between January and July, outstripping losses to card fraud. Banks are required to refund you for losses to unauthorised fraud such as card fraud, but not APP fraud. You will have noticed that we ran a couple of items in our client magazine Spotlight about fraud and scams.

The voluntary CRM code was launched in May 2019 and requires signatory banks to provide effective warnings to customers, identifying vulnerable customers and acting quickly when a scam is reported. In return, you are expected to pay attention to take care, have a reasonable basis for believing the payment is genuine, and pay attention to warnings.

Crucially, signatory banks must reimburse customers even if both parties have done nothing wrong. Data shows that many victims have been wrongly denied compensation but haven’t approached the FOS. Escalating a complaint to the FOS is free, and can be done online, but not all victims will be aware of or able to use the service. That’s why Which? wants the government to swiftly take the necessary action to enable the Payment Systems Regulator (PSR) to introduce mandatory APP fraud reimbursement for all firms using Faster Payments.

If I were a betting man, (which I am not) I would conclude that Banks will find a way to recoup some of their costs from customers, this normally takes the form of higher interest rates or charges on all forms of borrowing. Alternatively, to end the myth of “free banking”. There is no such thing and its about time we all had a grown-up conversation about it.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email


Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – 
Call – 020 8542 8084


Are we a good fit for you?


Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email –    Call – 020 8542 8084


Are we a good fit for you?


The PPI Claims Scandal

The PPI Claims Scandal

The storms and floods that have swept Britain seem to mirror the PPI claims scandal. You will remember that predominantly Banks, sold payment protection insurance to anyone with a credit card, loan or mortgage. On the face of it this seemed like quite sensible planning, but in practice, the insurance wasn’t worth having as for the majority of people it would never have paid a claim. Unfortunately the regulator was not responsible for this sort of insurance during most of the mis-selling. The Banks didn’t acknowledge a problem. It took a consumer champion (Martin Lewis) to get the Banks to admit a problem and begin addressing it. The scale is huge, probably far larger than anyone previously thought.

PPI Claims Companies

As a consequence, there has been a plethora of claims companies all offering to assist people with their claims. Indeed, this and my previous blog have been systematically targeted as yet another opportunity to push their services. Whilst I am fairly sure that a few of these companies are probably honest, the majority are nothing short of ambulance chasing opportunists with only their own interests at heart. Taking a lesson from direct marketing, they appear to believe that if you chuck enough muck, some of it will stick. Like most of you, I have had a social media bombardment – website, emails, text and phone calls assuring me that I have thousands of pounds to claim. I don’t. I didn’t have any PPI, neither did I advise any client to take any out. There is deliberate intent to simply encourage complaints in the belief that “nothing ventured, nothing gained”.

Wasted Resources – Jobs For Paper Pushers

Unfortunately, these practices have resulted in the Financial Ombudsman being overwhelmed, needing to recruit more and more staff to simply handle the volumes. Who pays for the FOS? well I do (advisers do). This means you do. This is a case of lose-lose. Very few advisers sold PPI, yet they are stumping up the costs. Today FOS announced that they increased their staff by 25% this year and may have to do the same again next year… paid for by? well you and me. As you may imagine, this has set off another spate of storms in the pink paper trade press today.

Reality Check

The 2011/12 annual review shows that FOS received 1,268,798 initial complaints. However only 264,375 turned into proper cases for complaint (19.4%). Some 201,793 were resolved by adjudicators and 20,540 actually resolved by ombudsmen. PPI complaints rose by 31% which amounted to 60% of all complaints and the highest number of complaints about any financial product or process ever. Over half of all complaints related to just 4 financial institutions, I dare say you could guess all four correctly. The cost to run FOS – well £108 million for the 1700 staff. That’s an average cost per capita of £63,500. My source? the FOS site Annual Review 2011/12.

The PPI Claims Scandal2023-12-01T12:23:12+00:00
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