The UK's Openness Task Force, a social business organisation that pushes for better transparency in financial services, has discovered that victims of financial crime experience "devastating" effects on their financial, social, and emotional life.
The organisation warned in a new study issued on Thursday that the regulatory environment for the sector is crumbling.
The study revealed that victims of financial crimes experience considerably more than simply a financial shock, and it urges for a regulatory overhaul and improved victim care.
"We discovered that the victims' experiences had a negative influence on all aspects of their life, including their finances, well-being, social relationships, emotions, and support," the report stated.
As reported by the Financial Times, the research noted that the themes of stigma, sadness, anxiety, suicide, and social disengagement exemplify the intensity and scope of these effects, but do not "complete the picture."
The study is comprised of 25 in-depth interviews with individuals impacted by an array of financial concerns.
Banks deceived clients with goods such as payment protection insurance, frauds involving bogus investment products, and "prisoner mortgages" in which customers are locked paying higher interest rates than the market.
In the 1990s and early 2000s, banks offered PPI to personal loan and credit card clients, with many lenders offering it to borrowers who were either unable to make a claim or ignorant that they were paying additional payments to purchase one.
The lenders have put aside £50 billion for reparations. 87 percent of PPI-related complaints were upheld, with redress payments totaling $2,000 (€2,400).
David Pitt-Watson, a fellow at the Judge Business School of Cambridge University, told the Financial Times, "Financial fraud is a cancer on our economy, on our culture, and on our nation."
He noted that this is a "very terrible problem in plain sight" and that "so much better" must be done.
The United Kingdom is now experiencing a "epidemic of fraud," according to UK Finance, a trade association for the banking sector.
Multiple victims have lost a total of £172M (€203M) due to fraudulent investments in gold, real estate, and cryptocurrency.
By fLEXI tEAM