How to protect yourself from a cost of living scam

When Chris got an email from his energy company offering him a discount on his latest electricity bill due to cost of living hardships, he clicked the link to submit his application for a refund. But two weeks later, the refund hadn’t been issued and Chris’ energy company had no record of him being eligible for a rebate. It was only then that Chris realised he had been the target of a phishing scam.

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As inflation continues to rise and households across the UK face an increasingly squeezed budget, criminals are finding new ways to exploit people's concerns about the rising cost of living.

In this blog post, we'll explore what cost of living scams are and provide you with valuable tips on how to spot and avoid falling victim to them.

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What is a cost of living scam?

A cost of living scam is where criminals seek to trick people into giving up their money or personal information by making false promises to deliver energy refunds, discounts, cost-of-living payments, tax rebates, and food vouchers. Government schemes with similar names have been rolled out over the past year to help support families and individuals in need, which can make it difficult to tell whether communication you’re receiving is legitimate.

How to spot a cost of living scam

Scammers employ various tactics including cold calls, emails, texts, and online ads to target victims. Recognising a cost of living scam attempt is crucial to protecting yourself. Here are some common signs to watch out for:

1.You are asked to apply for a cost of living payment proactively

If you receive a telephone call, message or email asking you to apply or contact someone about a cost of living payment, it is likely to be a scam. If you are eligible for these payments you will be paid automatically into your bank account - you will never be asked to apply yourself.

Criminals perpetrating this scam will often pose as government agencies like the Department for Work and Pensions - remember that these agencies will never ask for personal details by text or email, no matter what they’re contacting you for.

2.You’re asked to apply for a rebate on your bills

From Winter 2022 to March 2023, the government ran a scheme providing every household with £400 off their energy bills. These payments were automatically taken off of people’s bills, but scammers used false promises of rebates to trick people into giving out their personal information. This particular scheme has now ended - but any promise to provide discounts on your household bills should be treated with extreme caution and reported to report@phishing.gov.uk.

3.Slight Discrepancies in Sender Information

Pay attention to the sender's email address or phone number, as scammers may use addresses or numbers that are slightly different from the genuine sender.

If someone you know, or someone claiming to be from your bank or the police asks you to move money, hang up, and call back using a known, trusted number. Scammers can manipulate caller IDs which makes it difficult to be sure who you’re speaking to.

If the call is legitimate, the person on the other end of the phone will understand your hesitation - don’t hesitate to hang up and confirm someone’s identity before giving out personal information.

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What to do if you’re the target of a cost of living scam

1.Verify Suspicious Messages Directly with the Organization

If you receive a message that seems dubious, claiming to be from an organisation, don't reply directly to the message. Instead, independently verify its authenticity by contacting the organisation using the contact information from their official website. Criminals often create deceptive messages that appear legitimate, so it's essential to validate any communication that raises doubts.

2.Avoid Using Provided Contact Details

Scammers often provide phone numbers or addresses within their messages. Do not use these provided details. Instead, rely on the official contact information available on the organisation's legitimate website. Remember, banks or other reputable organisations will never ask for personal information through email or text.

3.Follow 'Take Five to Stop Fraud' Advice

Follow the 'Take Five to Stop Fraud' advice to safeguard yourself from potential scams:

• Stop: Take a moment to pause and think before sharing any personal information or parting with your money.
• Challenge: Question the authenticity of the message. If something feels off or too good to be true, it's okay to reject, refuse, or ignore the request. Criminals often use urgency or fear to manipulate victims.
• Protect: If you believe you've been scammed, contact your bank immediately and report the incident to Action Fraud. Quick action can minimise potential damage.

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REMEMBER

Staying informed about the tactics scammers use and following these guidelines can significantly reduce the risk of falling victim to cost of living scams. Being vigilant and proactive is the key to protecting ourselves and our finances. Remember to always Take 5: stop, challenge, and protect yourself to keep yourself safe from potential scams. If you’re a Wise customer and think you’ve been scammed, you can report this and get in touch here.