Scaling customer empathy: A blueprint for intelligent dispute resolution

Increased regulatory scrutiny over the handling of fraud claims has highlighted a significant gap in bank performance. While the Financial Ombudsman Service (FOS) demands faster and more empathetic outcomes, the reality of manual, siloed internal processes makes it difficult for institutions to keep up with these standards. This is not just a hypothetical concern. Recent data published by The Guardian confirms this discrepancy, showing that for some major banks, over a third of fraud-related decisions are being overturned upon appeal.

The high rate of overturned decisions by the FOS indicates that banks have challenges in treating vulnerable victims of fraud and scams fairly or consistently.

This systemic misalignment not only impacts the customer, but it also creates a high-stakes environment where banks find themselves caught between outdated fraud/dispute management systems and the increasing legal and regulatory pressure to protect consumers.

Navigating the new standards of accountability

This friction has surfaced five critical challenges that are currently straining the industry:

• High "wrongful rejection" rates. The biggest pain point is the data showing that banks are frequently making the wrong call. This suggests that the banks' internal criteria for what qualifies as a "refundable" fraud or scam is significantly out of step with the FOS standards for fairness.

• Mandatory reimbursement rules. Banks are now operating under a new government rule (introduced in 2024) that obligates them to refund most victims of Authorised Push Payment (APP) fraud. Previously, many of these refunds were voluntary. This shift puts a massive financial burden on banks to pay for losses that were technically "authorised" by the customer, even if they were tricked into doing so.

• Regulatory fines and compliance. The banks are facing direct punishment for non-compliance with consumer protection requirements, making this a costly and time-sensitive problem for banks to solve.

• The burden of historic cases. The high rejection rates in current reports often stem from fraud that happened years ago. Managing these legacy complaints while trying to keep up with current fraud is a significant operational strain.

• Reputational fragility. For banks built on modern transparency, high "wrongful rejection" rates are a critical failure point. This damages brand trust and complicates the path forward in a market where a "customer-friendly" image must be backed by consistent, fair results.

The manual processing deadlock

Typically, handling card disputes and fraud claims has been a labor-intensive battle. Back-office fraud/dispute teams are buried under manual work and siloed systems, leading to missed deadlines and unnecessary financial write-offs. Meanwhile, front-office staff, often not specialised in complex dispute rules, struggle to provide the consistency customers expect or collect all input the dispute/fraud teams need to work on the cases.

When a bank incorrectly rejects a fraud claim, it's often because of a mistake in the process or because an overworked agent following a siloed script has missed the relevant context of the fraud or scam. This creates a cycle where:

• The Bank is constrained by manual workflows and escalating regulatory fines.

• The Cardholder feels stressed, ignored and in the dark.

• The Financial Ombudsman Scheme (e.g., FOS in the UK) ultimately has to step in to correct the lack of fairness.

A blueprint for intelligent dispute resolution

Amiko by Rivero offers a way to break this cycle by moving from reactive processing to "Zero-Touch" recovery.

We’re seeing a transformation in how our partners handle disputes:

• Intelligent self-service. Implementing digital intake systems that handle the heavy lifting of initial data collection and automatically pre-validate claims against payment network or regulatory rules before they reach a human agent.

• Automated recovery pathways. Leveraging automation to resolve a significant percentage of pre-disputes automatically, such as through direct merchant credits, moving money back to the cardholder without requiring human intervention.

• Proactive claim deflection. Utilising transaction data combined with consumer protection rules (from regulators or payment networks) to identify and deflect clearly unjustified/invalid claims, protecting the bottom line, reducing workload on the team while upholding robust consumer protection standards.

• Compliance automation. Replacing hours of manual administrative work with the instant, automated generation of mandatory forms, reports (like fraud reporting, Mastercard Dispute Resolution Forms, and Visa Questionnaires), which drives a drastic reduction in manual work while ensuring 100% compliance and filing accuracy.

By digitising and automating the "omni-directional" communication between the bank, the merchant, and the cardholder, banks can ensure that every case is handled with the precision regulators demand, along with the speed and care customers deserve.

Ready to close your consumer protection gap? To see how these principles are being applied to achieve industry-leading results, you can learn more about our intelligent automation solution, Amiko.

Watch a recorded demo to see Amiko in action.