The Financial Ombudsman Service (FOS) is expecting to deal with 4,000 more fraud and scam cases in the banking and loan sector over the next 12 months - a rise of over 12%.

The FOS said the rise in banking fraud and scams, some of them complex to deal with, was fuelling its workload.

In its latest case forecast prediction, the FOS said it expected the number of banking and loan cases it will deal with in the next 12 months to rise from 33,000 to more than 37,000.

Overall the FOS is expecting to deal with 270,000 complaints over the next year including around 240,000 new complaints, including pension and investment cases.

The Financial Ombudsman Service said it expected fraud and scams to account for 35% of its banking and loan cases in its next financial year (excluding credit cards and motor finance commission.)

The service is seeking views on its forecast case volumes for 2025/26 in a consultation that closes at the end of this month. The FOS says it is also working with the Financial Conduct Authority to modernise the redress system.

The Financial Ombudsman Service is predicting more than 37,000 fraud and scams complaints in banking and loans, including cases involving authorised push payment (APP) scams, cryptocurrency fraud and ‘safe account’ scams. The FOS also expects problems with savings accounts, short term lending and mortgages.

Abby Thomas, chief executive and Chief Ombudsman at the FOS, said: “It’s concerning to see high levels of fraud and scams cases continue to come to our service. People can feel embarrassed to have fallen victim to a fraud or scam, but these crimes can be complex and incredibly convincing, and nobody should be afraid to come forward.”

The current FOS consultation comes alongside a Financial Ombudsman Service and Financial Conduct Authority (FCA) joint Call for Input looking at how to modernise the redress framework to ensure it is “fit for the future.”

The Call for Input is seeking views on how to prevent financial issues leading to a spike in complaints and creating uncertainty for firms and their customers.

Ms Thomas added: “I want to seize this opportunity to modernise the redress framework and ensure our service remains vital and relevant not only for today, but also continues to underpin confidence in financial services for the next generation of consumers and businesses.”

Other proposals outlined in the Plans and Budget consultation include freezing all case fees and levies for financial firms at their current level, saving the industry £70m to industry compared to pricing in 2023/24.

• The consultation on the Financial Ombudsman Service’s Plans and Budget is open until 29 January and is available here. The Call for Input runs until 30 January 2025 and is available here.