The UK's Financial Ombudsman Service (FOS) has communicated an increasing number of financial scams, especially those related to cryptocurrencies. The FOS stated that there was an increase in complaints involving 'hybrid' stings or at least more than one type of scam.

The latest data shows that in the 2022-2023 financial year, the FOS received 21,918 fraud and scam complaints. The figure represents an 18 percent increase from 18,450 cases reported between 2021 and 2022. Furthermore, the FOS reported that almost half of the complaints were related to online payments.

Rising ‘Hybrid’ Scams

The FOS, which settles complaints between financial institutions and consumers, observed that 'hybrid' scams have become rampant. They involve a combination of romance, purchase and 'safe account' scams. In light of this, the FOS noted that banks should consider the latest trends in their fraud prevention measures.

More people seeking the services of the FOS were receiving favourable responses, the FOS said. It added that the uphold rate, which shows how often it agrees with consumers, was recorded at 35% for financial products and services, standing above its average. In addition, the uphold rate for fraud and scams was 45% while online payment scams were above 50%.

Commenting on the FOS report, William Christopher, the Civil Fraud Partner at the law firm, Kingsley Napley, told Finance Magnates that most investment scams were usually done by online platforms purporting to generate huge returns for their investors. In reality, the scammers do not generate any profits but instead steal from their victims.

"However, there are steps that can be taken via a civil law route such as obtaining freezing injunctions and search orders, so it is certainly worth considering such, especially where losses are sizeable," Christopher explained. "Fraudsters thrive on the idea that they are beyond the law, but that need not always be the case."

UK Strengthens Regulations

Meanwhile, in a separate report, the Financial Conduct Authority (FCA) said at the beginning of the month that it was finalizing regulations regarding cryptocurrency marketing and advertising in the UK. The new rules are expected to take effect from October 8.

According to a document published by the regulator, the regulations will categorize cryptocurrencies are 'restricted mass market investments'. Furthermore, they will compel cryptocurrency companies to conduct adequate due diligence for cryptocurrency services to be advertised. This is to ensure that financial promotions are 'fair, clear and not misleading'.

Revolut slashes crypto fees; BitPay adds new payment options; read today’s news nuggets.