The Financial Conduct Authority (FCA) has warned of a sharp increase in impersonation scams after receiving nearly 5,000 reports in the first half of 2025, underscoring the growing financial and insurance risks posed by fraud. From January to June, 4,465 reports were made to the FCA’s consumer helpline, with 480 victims tricked into transferring money. Older people remain disproportionately targeted, with almost two-thirds of cases involving those aged 56 and above.
Scammers impersonating the regulator often claim to have recovered money from illegally opened crypto wallets or offer to help victims of loan scams recover lost funds. Others issue false County Court Judgment demands, instructing consumers to pay the FCA directly. A further trend, known as “pig butchering,” involves building personal or romantic relationships before luring victims into long-term investment scams, followed by a second fraud in which criminals pose as the FCA promising to recover the lost money.
The regulator has stressed that it will never ask for money transfers, PINs, or passwords, warning consumers to remain alert to unsolicited approaches.
Impersonation fraud puts increasing pressure on insurers
The rise in impersonation fraud highlights increasing pressure on insurers offering cyber, financial crime, and identity theft products. While demand for personal cyber insurance remains limited in the UK compared to markets like the US, the frequency of scams is driving interest in products that cover social engineering, phishing, and authorised push payment (APP) fraud.
However, policy wording remains a sticking point. Insurers often draw a sharp distinction between theft and voluntary transfers of funds, which can leave policyholders exposed. Claims disputes have emerged where customers argue that they were manipulated into authorising payments, while insurers classify these as outside traditional crime cover.
Commercial clients face similar challenges. Crime and cyber policies are being adapted to clarify whether recovery scams and impersonation schemes fall within scope, but inconsistencies remain between markets and providers. Brokers are increasingly called on to guide businesses through exclusions and sub-limits that determine whether losses are recoverable.
At the same time, insurers are investing in preventative measures. Alongside regulators and banks, some carriers are funding consumer awareness campaigns, fraud monitoring tools, and employee training modules aimed at reducing claim frequency. The industry’s role is shifting beyond claims settlement toward collaborative fraud prevention.
The FCA’s figures follow 10,379 impersonation scam reports in 2024, nearly 1,000 of which resulted in direct financial losses. If current trends continue, 2025 could surpass those levels, placing further strain on insurers’ fraud-related loss ratios and sparking renewed debate over how far coverage should extend into increasingly complex scam activity.
