Ombudsman warns about rise in scams and fraud
21st December 2024
Small businesses across the UK have been facing many financial challenges in 2024, including fraud and scams, the Financial Ombudsman Service has revealed.
The latest data that covers the period from the beginning of April to the end of November 2024 has shown that the Financial Ombudsman Service has received more than 4,800 new cases from businesses so far this financial year.
The Financial Ombudsman, which is free for consumers and accessible to 99% of small businesses in the UK, often hears from firms across a wide variety of industries, including farming, hospitality and retailing, as well as traders such as plumbers, electricians and hairdressers.
Fraud and scams remain the most common issue raised by these businesses, with over 1,000 complaints received in this category so far this financial year.
This marks a significant rise compared to the same period last year, when around 600 fraud-related complaints were submitted.
Just under half of these latest fraud and scam complaints were in relation to authorised push payment (APP) scams. These are cases where people use an online bank transfer to inadvertently pass money to a fraudster.
Sophisticated tactics
Fraudsters often trick businesses through a host of sophisticated scams, such as impersonating the business’s bank, intercepting and amending invoice details, or impersonating a director.
James Dipple-Johnstone, deputy chief ombudsman at the Financial Ombudsman Service, said: “Fraud and scams are a growing problem for businesses, with increasingly sophisticated tactics being used to exploit vulnerabilities.
“While in many situations we find that financial providers have acted fairly, there are also times when we believe more could have been done to protect businesses.
“If a business feels dissatisfied with how their complaint has been handled by their bank or provider, it is straight-forward for them to bring their case to us for free.”
Beyond fraud, the Ombudsman has received over 900 complaints from businesses about their financial provider’s administration and customer service, including delayed letters and poor service-impacting operations.
It has also heard from firms that were unhappy that their insurer declined their commercial motor and property insurance claims.
Support through financial disputes
Between April and November 2024, the Financial Ombudsman received around 140 complaints from charities, with administration and customer service topping their list of grievances.
Mr Dipple-Johnstone added: “Whether it’s a small shop, a family-run farm or a tradesperson just starting out, we are dedicated to supporting businesses throughout their financial disputes.
“Our service is impartial and easy to use – we’re here to listen and make sure both businesses and their financial providers get the fair treatment they deserve.”
The Financial Ombudsman is currently consulting on its plans and budget for the next financial year.
In 2025/26 the organisation has predicted it will resolve around 270,000 cases and will further build on its ongoing transformation.
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