Finance firms in the Channel Islands paid out nearly £2 million in compensation last year after customers complained to the pan-island financial ombudsman.
However, the true figure is higher as some disputes were settled confidently, the Channel Islands’ Financial Ombudsman (CIFO) said.
Douglas Melville, Principal Ombudsman and CEO, said fraud had become “the most significant and impactful complaint theme during the year”.
Fraud cases exploded from just 21 in 2022 to 91 in 2024, before easing slightly to 61 last year.
Fraud accounted for 15% of all cases resolved by the ombudsman in 2025.
The most-common complaint was poor administration (23%), followed by non-payment of a claim (16%).
The ombudsman handled 571 complaints in total last year, opening 405 formal cases and closing 403.
Around 60% were settled informally, while compensation awards totalled £1.97m – although the report notes actual settlements were “a multiple of this figure” because many agreements remain confidential.
Banking disputes dominated the watchdog’s workload in Jersey, making up 92% of complaints, according to CIFO’s latest annual report.
Meanwhile in Guernsey the majority of complaints (72%) were about the insurance sector.
Around 14% of cases involved customers having accounts frozen or closed, often without clear explanations from banks.
Duped
The report criticised delays and poor communication by some banks, warning that customers were sometimes left in limbo “even when the customer had done nothing wrong”.
In once case, a couple lost £4,750 after being duped into revealing a one-time passcode to fraudsters posing as bank staff.
The ombudsman ruled the bank had failed to provide adequate warnings and ordered them to pay compensation.
More than three quarters of the people making complaints in 2025 lived outside the Channel Islands, the CIFO said, with the majority coming from Europe, followed by Asia and North America.
