Fraud complaints 'explode' in growth since 2022
There has been an "explosive growth" in the number of cases of fraud reported to the Channel Islands' financial complaints service.The Channel Islands Financial Ombudsman's (CIFO) annual report said it opened 364 cases relating to complaints made by people in Jersey and Guernsey in 2024.Of those cases 65 were "fraud and scam-related", up from just five in 2022, an increase of 1,200%.The CIFO describes itself as an independent service which resolves complaints between people and their financial service providers, such as banks, investment firms, and insurance companies.
'Systemic issues'
"Arguably the largest was the explosive growth in the number of complaints involving losses due to fraud", said Douglas Melville, the principal ombudsman."The nature of fraud complaints demonstrates a variety of underlying types of attack and systemic issues that raise significant questions for industry, regulators, dispute resolution bodies like CIFO, and the general public."Complainants from Jersey and Guernsey also submitted 120 complaints about their financial services showing "poor administration or slow delay".The report added: "These issues can be attributed to various underlying factors such as lack of sufficient 24/7 staff coverage."[And] the inability for complainants to reach a live customer service person to communicate issues to their banks on a timely basis."There were 364 cases opened in 2024, 340 were closed.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Finextra
4 hours ago
- Finextra
Preparing for BNPL regulation: What firms need to do now: By Ben O'Brien
The arrival of formal regulation for Buy Now, Pay Later (BNPL) products is no longer a question of if, but when. With the Treasury's May 2025 consultation response, the direction is this: by mid-2026, third-party BNPL lenders will fall within the scope of the Financial Conduct Authority (FCA). This change brings with it a full set of regulatory requirements—covering affordability, creditworthiness, redress, disclosures, and governance. While many firms are familiar with the general framework, the pace and detail of implementation demand serious attention. Risk leaders now face a critical window to build a strategy that aligns commercial goals with regulatory readiness. Scope of the new BNPL regime From mid-2026, third-party BNPL providers must be authorised by the FCA and comply with its rules on affordability, creditworthiness, consumer duty, complaints, disclosures, and more: Mandatory, proportionate affordability and creditworthiness checks Firms must demonstrate verifiable checks at the point of decisioning, aligned to individual circumstances, not just product type. Firms must demonstrate verifiable checks at the point of decisioning, aligned to individual circumstances, not just product type. Access to the Financial Ombudsman Service (FOS) BNPL customers can now escalate complaints to FOS, increasing the importance of auditable redress processes and timely resolution. BNPL customers can now escalate complaints to FOS, increasing the importance of auditable redress processes and timely resolution. Tailored disclosure requirements for digital-first products The FCA will introduce a bespoke regime focused on real-world comprehension — not just information delivery. Firms will need to test and evidence understanding. The FCA will introduce a bespoke regime focused on real-world comprehension — not just information delivery. Firms will need to test and evidence understanding. Extension of Section 75 protections to BNPL agreements Providers will be jointly liable for qualifying claims, requiring clear merchant oversight, governance controls, and capital planning to manage new exposure. While third-party BNPL is the initial focus, merchant-offered BNPL products remain outside the perimeter for now. This exemption, based on Article 60F(2) of the Regulated Activities Order, is under review and could be revisited if scale or harm increases. What this means for compliance and risk leaders The FCA isn't looking for surface-level compliance. It expects firms to demonstrate that processes are working and that consumers are genuinely protected. Affordability frameworks must evolve Checks must be proportionate and verifiable, with models recalibrated to reflect customer circumstances. Even low-value lending must evidence the potential for harm reduction. Complaint handling will need to be FOS-ready This includes robust audit trails, clear redress pathways, MI reporting on themes, and training on FOS processes. Joint liability introduces new exposure Providers must enhance governance around merchant partnerships, define liability clearly in contracts, and plan for potential claims in their capital models. Joined-up governance is essential Effective programmes will require close collaboration across credit, compliance, legal, product, and ops teams—with clear ownership under SM&CR. Disclosures must reflect real-world understanding It's not just about format. The FCA expects firms to test, monitor, and evidence comprehension—particularly for vulnerable customers. Making best use of the Temporary Permissions Regime The FCA will launch a Temporary Permissions Regime (TPR) to support the transition. Providers must be ready to act quickly when the window opens. Prepare for registration Ensure that internal records, model documentation, and business models are clearly aligned with regulatory expectations. Conduct a readiness assessment Review decisioning processes, affordability checks, complaints management, and financial crime controls. Plan for dual-track execution Meet TPR requirements while simultaneously building toward full authorisation. Engage early with the FCA Establish open communication lines to reduce ambiguity and show proactivity. Plan for contingencies Prepare wind-down plans, customer messaging, and backup procedures in case of registration delays or rejections. Innovation and consumer protection can coexist The decision to exclude some legacy Consumer Credit Act requirements reflects the unique nature of BNPL: short-term, interest-free, and often accessed via digital channels. This creates space for a more relevant, user-centric approach to disclosures but it also raises the bar. Risk and compliance teams should work with product, legal, and design leads to ensure communications are: Integrated into real customer journeys Mobile-friendly and accessible Prompted by user behaviour Supported by outcome-based testing and complaints data Those who treat disclosures as a compliance task may struggle. Those who invest in relevance and usability will have stronger customer engagement and defensibility. Merchant carve-out and the risk of market distortion The decision to exclude merchant-led BNPL from the regulatory scope has sparked debate. Without oversight, merchant-offered credit could create competitive asymmetry and raise consumer protection concerns. Risk leaders should: Monitor merchant product developments and prepare for potential perimeter expansion Review all third-party merchant partnerships for regulatory dependencies Revisit financial promotions and credit broking arrangements, particularly where merchants promote BNPL products without broking permissions Regulatory costs and anticipated market impact The Treasury's impact assessment estimates: An Equivalent Annual Net Direct Cost to Business (EANDCB) of £2.3 million A Net Present Value of -£20.1 million over the assessment period over the assessment period Authorisation application fees: £5,000 to £25,000 Annual supervision fees: £10,000 to £50,000 Technology upgrades: £500,000 to £2 million per provider for systems supporting affordability, reporting, and complaints per provider for systems supporting affordability, reporting, and complaints Section 75 exposure: Estimated at 0.5% to 1.2% of transaction values With the UK's BNPL market valued at £20 billion annually, sector-wide exposure to Section 75 alone could exceed £100 million. Consolidation is expected. Government modelling suggests 20–30% of providers may exit the market post-regulation. But with global BNPL volumes growing rapidly, those who remain stand to benefit from a stronger, more trusted marketplace. How leading firms are responding Some providers have already started adjusting: Klarna Following regulatory scrutiny in Sweden, Klarna UK introduced income verification, real-time spend tracking, and risk-based onboarding. Monzo Flex Built affordability into product design from the outset, with integrated credit reporting and real-time tracking. PayPal Adopted a cross-functional compliance strategy with specialist teams, training, and documentation of governance processes. The clock is ticking and the gap between those who prepare and those who delay will widen fast. For risk leaders, this is a chance to go beyond baseline compliance, strengthening frameworks, improving customer outcomes, and shaping the future of BNPL in a regulated environment.
Telegraph
7 hours ago
- Telegraph
Unite union had ‘pervasive fraud environment', leaked report says
One of Britain's biggest trade unions had a 'pervasive fraud environment', a leaked auditors' report has concluded. Global tax advisory firm BDO found there had been a culture at Unite that 'did not challenge the appropriateness of transactions' and failed to ensure appropriate financial reporting. The review, which took four years, concluded that 'dominant personalities and a weak control environment facilitated opportunities to commit fraud' at the union. The audit was ordered by general secretary Sharon Graham shortly after she entered her role in 2021 amid questions about accounting and spending on building a hotel and conference centre in Birmingham. Its findings were presented to the union's executive council on Friday. Unite said the probe uncovered a £53.8 million 'impairment' related to the difference between the original valuation of the Birmingham project used to calculate the 'book value' by the auditors at the time, and the real value. 'This process has quite frankly been an ugly one' The BDO report also said there had been 'unusual relationships' between former senior staff and Unite's customers and suppliers, according to the BBC which obtained a copy of the 35-page document ahead of its publication. In response, Ms Graham, who has pledged to strengthen internal governance practices, said: 'On behalf of Unite's 1.2 million-plus members, I promised on my election that I would uncover the truth about historic alleged corruption related to the Birmingham hotel project. 'This process has quite frankly been an ugly one, where I have endured attacks and smears from those with much to lose, but they have not deterred me. 'The re-audit is in its final stages and as we move to completion, I will ensure steps are taken so that this can never happen again and we have already started the process of getting our money back. 'Over the last three years of my leadership, I have refocused our union on to the jobs, pay and conditions of our members and we have secured a union that is financially strong and able to fight for workers.'
The Independent
10 hours ago
- The Independent
Unite union had ‘pervasive fraud environment', auditors say
One of Britain's biggest trade unions had a 'pervasive fraud environment', a leaked auditors' report has concluded. Global tax advisory firm BDO found there had been a culture at Unite that 'did not challenge the appropriateness of transactions' and failed to ensure appropriate financial reporting. It concluded 'dominant personalities and a weak control environment facilitated opportunities to commit fraud' at the union. The audit was ordered by general secretary Sharon Graham shortly after she entered her role in 2021 amid questions about accounting and spending on building a hotel and conference centre in Birmingham. Its findings were presented to the union's executive council on Friday. Unite said the probe uncovered a £53.8 million 'impairment' related to the difference between the original valuation of the Birmingham project used to calculate the 'book value' by the auditors at the time, and the real value. The BDO report also said there had been 'unusual relationships' between former senior staff and Unite's customers and suppliers, according to the BBC which obtained a copy of the 35-page document ahead of its publication. In response, Ms Graham, who has pledged to strengthen internal governance practices, said: 'On behalf of Unite's 1.2 million-plus members, I promised on my election that I would uncover the truth about historic alleged corruption related to the Birmingham hotel project. 'This process has quite frankly been an ugly one, where I have endured attacks and smears from those with much to lose, but they have not deterred me. 'The re-audit is in its final stages and as we move to completion, I will ensure steps are taken so that this can never happen again and we have already started the process of getting our money back. 'Over the last three years of my leadership, I have refocused our union on to the jobs, pay and conditions of our members and we have secured a union that is financially strong and able to fight for workers.'
