How scammers are using the cost of living crisis to target you

As the cost of living crisis is intensifying, and more people are being affected by the increasing costs of everything from fuel to food, scams are on the rise.

Figures cited by MoneyAge claim that scammers have targeted 73% of people in the UK in the three months leading up to September 2022. That is a 14% increase from this time last year.

Scammers are increasingly preying on people’s worries and fears about their finances. Due to this, the Financial Conduct Authority (FCA) has warned that financial crime will rise even further.

While people of all ages can fall victim to scammers, if you have access to your pension or you are nearing pension age then you are a prime target. Research released by AgeUK shows that almost 5 million older people (those above 65) believe scammers have targeted them.

While tremendous efforts are being made by banks, Citizen’s Advice, and the government to help protect people from these fraudsters, one of the best ways to avoid being a victim of a scam is to know the types of scams about and the tricks that these thieves use.

Scams are offering discounts on energy bills

As a result of the war in Ukraine, the cost of energy has risen dramatically in the past year.

The BBC report that annual energy bills for households using a standard amount of energy have now increased to £2,500. So, to provide support for ever-increasing bills, the government introduced a £400 discount.

Scammers are using the current issues around energy prices to defraud people. Many are using “brand cloning”, where they claim to be from the regulator Ofgem. Here, the scam tells people they need to claim the support given by the government.

The scammers produce fake emails or text messages that often contain phishing links. These links trick people into downloading a virus or providing personal information such as their bank details.

Be aware that households in England, Wales and Scotland do not need to apply for this discount as it is applied automatically.

Some scams claim to write off debts

With the cost of living rising, many people are experiencing financial hardship and are looking for ways to reduce this burden.

This has led to new firms that offer unauthorised claims management services.

These firms offer to write off your debts, such as mortgages, and possibly to obtain compensation from lenders, such as past payments for capital or interest.

They will then charge a fee and add more costs to the process while not writing off any debt. This leads to significant losses for anyone convinced to take up that offer.

Any firm offering and promoting claims management services have to be registered with the FCA. If you are approached by a company not registered or authorised by the FCA, it is highly likely they are a fraudulent company.

Brand cloning scams usually involve copying a trusted organisation

Brand cloning fraud or impersonation scams (as seen with Ofgem above) are also rising.

UK Finance states that, in the first half of 2021, there were more than 30,000 cases of this sort of fraud, which led to losses of up to £129 million. This is double the amount for the same period the year before.

These scams often begin with a text message or document from a trusted organisation such as a bank or the Financial Services Compensation Scheme. These text messages, calls, emails, or other forms of communication will bear the logos and correct information of the brand being cloned.

They will then attempt to trick you into sending money or gathering personal information such as your bank details.

Pension and investment scams will always seem too good to be true

There are many types of pension scams. Common frauds involve companies asking individuals to withdraw or transfer their pension, before the scammers steal the money. Others convince people to use their pension to fund unusual investments with “guaranteed” high returns.

Fraudsters will try numerous different ways to persuade you to part with your pension, from providing false information, such as offering access to your pension early due to loopholes, to promising opportunities that are too good to be true.

According to the National Council on Aging (NCOA), in the US, investment scams were responsible for more than $239 million in losses suffered by people aged 60 and older in 2021.

Keep yourself safe by knowing the key signs of a scam

Scams can be challenging to recognise but knowing the possible indicators can help keep your private information and wealth safe. Indicators include:

• The offer sounds too good to be true
• You are contacted out of the blue by a company
• You are being asked to transfer money quickly
• A company asks for your personal details, including bank details.

There are also numerous tactics you can do to prevent being scammed. Always check that any company you are dealing with is legitimate – for example, by checking they appear on the FCA Register.

Additionally, don’t click/download anything you don’t trust, and don’t give out personal information to anyone – particularly if they initiated the conversation.

Banks, for instance, will never ask for personal details.

Get in touch

If you have any concerns about scams or need advice about your finances, pensions or investments, or you’d like to establish whether an investment opportunity you have been offered is genuine, please get in touch.

Email us at office@verve-financial.com or call 0330 320 5048.

Please note

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.

Posted 13/10/2022