‘Scamming has become an industry’ - financial arbiter reflects on last year

Last year saw a “disturbing” increase in the prevalence and sophistication of fraud, with some cases potentially involving losses of up to hundreds of thousands of euros, the financial arbiter said Friday.

In a statement announcing a report covering the office’s activities last year, Arbiter for Financial Services Alfred Mifsud pointed to a “particularly disturbing” growth in fraud cases, “and particularly the quality of the fraud”.

“We are seeing cases which involve a lot of euros, perhaps even hundreds of thousands of euros. The scammers are getting more creative; I would say scamming has become, for them, an industry.”

The office of the Arbiter was set up by legislation in April 2016 to mediate, investigate and adjudicate complaints filed by customers against all financial services providers

Announcing the report, the arbiter noted it had updated its processes in relation to complaints about relationship scams, otherwise known as “pig butchering” – online scams where victims are encouraged to make increasing payments to the scammer. 

A record 251 cases were submitted to the arbiter, with those related to savings, current and term accounts, “life-related” products and cryptocurrency assets among the most common grievances, the report showed.

The office of the arbiter said it had received 66 complaints about savings/current/term accounts, 60 regarding “life-related” products and 31 in relation to crypto assets.

The most common issues raised were regarding “value at maturity” (56), general administration and customer service (38) and “suspected irregular activity” (34), it said.

More than half (54%) of the arbiter's 94 decisions last year – some 51 cases – did not uphold the complaint, while 38% were partially upheld and 7%, representing seven cases, fully upheld.

While compensation ranged between €1,000 and €5,000, some were significantly higher; the highest awarded was worth almost €120,000.

"Mediation proved particularly effective” last year, with agreements reached for more than half of the cases – an increase from the previous year, when around a third of mediation efforts resulted in agreements, the arbiter said.

“What is particularly very impressive is the... substantial increase in complaints which have been resolved without actually coming to me for adjudication because we have increased the resources of our mediation services,” Mifsud said.

The arbiter noted that the average time to close a case in instances of mediation was almost three months (89 days), around a month (27 days) faster than the previous year.

It reminded the public that regular information could be found on its Facebook and LinkedIn pages.

The full copy of the report may be found here.