Complaints about banking scams and fraud have surged 43 per cent to an all-time high, the finance industry’s adjudicator has said.

Payday loan criticism also more than doubled last year, with a “startling” 40,000 new disputes opened. The “unacceptable” rise pushed the total number of complaints to the Financial Ombudsman Service (FOS) up 14 per cent to 388,392 – the biggest annual total in five years.

Scams where fraudsters convince victims to transfer money out of their accounts are now one of the fastest-growing types of fraud, the FOS said. Advanced push payment (APP) fraud can leave people without their life savings and with no chance of redress because banks do not have a duty to refund money in such cases. 

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A new voluntary code to help victims of APP fraud is being introduced in May as part of efforts to tackle the issue.

Caroline Wayman, the FOS’s chief ombudsman and chief executive, said: “People manage their money in a variety of ways, and fraud and scams are becoming ever more sophisticated.

“We know from the complaints we see that banks aren’t always treating victims of fraud fairly. They must do better.”

On banking complaints generally, she said: “Too often we see that the interests of consumers are not hardwired into financial services. The behaviour we’ve seen from some businesses is simply not good enough.”

Payday loans accounted for 39,715 new complaints to the FOS in the 12 months to March, marking a 130 per cent rise from a year earlier.

Regulators have cracked down on payday lenders like Wonga, which fell into administration last August. The Financial Conduct Authority (FCA) capped interest rates and charges on payday lending but this has sent many companies out of business, leaving those who have complained that they were mis-sold loans unable to claim compensation.

In February, the House of Commons Treasury Committee said the government may have to step in to help 10,500 Wonga customers who have been “cast aside”.

The situation “cannot be right”, said Nicky Morgan, chair of committee, in a letter to the FCA. “These people have been left to fend for themselves by Wonga, the FCA and the FOS,” Ms Morgan said. “They’ve been allowed to fall through the cracks with nobody taking responsibility for their mistreatment.”

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Ms Wayman told the Treasury Committee in January that customers who had open complaints will not be able to have their issues resolved. The customers, many of whom are considered vulnerable, are also unable to obtain redress through the Financial Services Compensation Scheme because high-cost credit firms like Wonga are not covered.

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