In its annual report, the Channel Islands Financial Ombudsman said that fraud was a key theme of its work in 2025, accounting for 15% of all the cases it resolved and with more than 60 complaints received.
Although fraud-related complaints were down on those made in 2024, they have grown quickly since 2021 and CIFO chief executive Douglas Melville said that in many ways it was the office’s ‘defining theme for 2025’.
‘It was one of the top three issues raised with us by customers and it was the main issue in 15% of the cases we resolved,’ he said.
‘While 15% might seem like a relatively small proportion, the amounts of money stolen, the impact on people’s lives, and the distressing stories we heard from customers made it the most significant issue we have dealt with so far this decade. Working positively with banks to put things right in these complaints was our biggest success story of the year.’
Mr Melville said that CIFO staff had become much better informed about fraud and how to deal with it in recent years. He said that staff recognised that the vulnerability of an individual customer would arise not only from their personal capacity, but also from the specific circumstances surrounding the fraud.
‘This broader understanding of vulnerability reflects developments in the UK and, more widely, in the EU and internationally, including in sectors beyond financial services,’ he said.
‘It helped us better understand what it means to be placed in a vulnerable position.
‘As a result, our reviews are more situation-specific, leading to more nuanced, fairer assessments and outcomes that better reflect the realities faced by victims of increasingly sophisticated frauds.’
Mr Melville said that CIFO would mainly treat authorised push payment fraud – where a customer is tricked into willingly transferring money to a fraudster’s account – differently to frauds where a customer is contacted and told that their account has been compromised and cards and security codes are compromised.
In the first instance the payments are authorised by the customer, sometimes despite warnings from their bank, and they would be less likely to be compensated than in the second, where the bank would have to prove gross negligence on the customer’s behalf.
Other factors considered for compensation include the actions taken by the bank and the vulnerability of the customer.
Mr Melville said that engagement with banks on the issue last year was ‘broadly constructive’.
‘The banks have shown a willingness to reflect on their internal controls and communication processes, and how to improve them,’ he added.
‘We consider these reflections to be of great benefit both to the banks themselves and to their customers. Already, several institutions have begun implementing new risk management and fraud prevention systems, informed in part by insights emerging from cases resolved with us.
‘While fraud as an issue is unlikely to go away any time soon, there is clear evidence that our engagement with an industry willing to listen is fostering a more resilient and responsive environment for customers.’
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