How to Avoid Scammers Exploiting the Cost of Living Crisis

NatWest issued advice for businesses to avoid scams

FOR the fifth installment of our cost of living campaign with NatWest, we take a look at five scams that SMBs (small and medium-sized businesses) could fall prey to. Rising costs for businesses have created golden opportunities for scammers.

Citizens Advice reports that more than 40 million people have been targeted by scammers this year, an increase of 14% from last year. Meanwhile, Action Fraud obtained figures from Which?, revealing that crime reports mentioning one of the ‘big six’ energy suppliers rose 10% in the first quarter of this year, compared to the same period last year.

Here are some of the most common new scams that businesses should be aware of:

1. Energy saving devices

Businesses looking to save on their energy bills could be targeted by fraudsters selling hardware solutions to rising energy costs. Who? says he found “no evidence” that any of the devices tested would reduce energy bills.

Look for a CE/UKCA mark on the product to ensure the item meets safety standards before plugging it in.

If you think you have been tricked, stop using it immediately.

If you paid by credit or debit card, you may be able to request a refund using chargeback or Section 75 of the Consumer Credit Act.

2. Insurance Broker Fraud

Fraudsters pose as insurance brokers and offer unrealistic offers. These “ghost brokers” accept payment for cheap insurance policies but never arrange cover. Over 500 cases of phantom brokerage, with losses totaling £1million, were reported to Action Fraud in 2021.

Beware of brokers who advertise cheap deals on social media or unsolicited SMS approaches.

Search the company name in the FCA website database. All legitimate insurance brokerage firms in the UK must be registered with the FCA.

If you think the company is fake, report it to the FCA and Action Fraud.

3. Fake debt collectors

The collapse of many energy companies has caused confusion in billing. If your business has been affected by a change in energy supplier, you could be the target of bogus debt collectors claiming non-existent debts.

Contact your energy supplier to ask if there is an outstanding debt on your account.

Beware if the collector asks you for information in relation to your supposed “debt” if legitimate, it is likely that he already has access to this information.

Do not be armed to make an immediate payment and research the debt collector online for information about his company.

4. Vouchers and Discounts

Several major supermarkets have warned customers about bogus voucher offers that prey on cost of living fears. A link in a fake email, text or social media post will lead someone to a survey, which asks for personal details such as login details and financial information, so they can receive coupons or refunds for goods and services.

Never click on a link unless you are sure it is safe.

Take a look at the official social media accounts of your favorite retailers and suppliers, they often post warnings to customers about bogus offers.

If you can’t find anything online, contact the retailer to let them know about the scam.

5. Reimbursement of energy tariffs

Action Fraud has issued a warning over fake text messages claiming to be from energy regulator Ofgem offering a £400 discount on their energy bills.

The scam has a basis in reality. In May, then-Chancellor Rishi Sunak announced that households with an electricity supply would receive a grant of £400, which would have to be paid in instalments and credited to their account. This scam asks people to click on a link to complete their grant application, including entering their bank details.

Ofgem will never text or email anyone to sign up for discounts or refunds.

Consider that your energy supplier already has your payment details and will never send an unsolicited email or text requesting them.

Read the full underlying email address or sender number, and don’t be afraid to call your energy provider, using the number on their website or your bill, to query the correspondence suspicious.

Next week we’ll hear from one of NatWest’s business banking managers in the South West about what it’s like to be an SME right now and what support is available for SMEs.

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