Beware of scammers preying on YOUR cost of living fears
Big High Street banks are today sounding the alarm over a looming fraud epidemic as cruel scam artists target people who have become ’emotional and panicked’ by the rising cost of living.
Banking giants including Barclays, HSBC and Santander are imploring customers to be extremely vigilant as scammers exploit economic uncertainty.
Financial watchdogs and consumer groups have also issued stark warnings of a surge in scams that exploit households’ financial vulnerability.
Online scams: Banking giants including Barclays, HSBC and Santander urge customers to be extremely vigilant as scammers exploit economic uncertainty
Ross Martin, head of digital security at Barclays, told Money Mail: “We have two sides to our brains: one is more rational and the other is more emotional.
“The fraudsters want us to act with the emotional side – the one that makes us panic and make decisions without thinking properly.
“As people worry about their finances, they go into this emotional state, which is a gift for scammers.”
Earlier this month, the Daily Mail revealed that households are facing a £6,000 rise in their bills this winter as energy costs, food prices and mortgage repayments soar arrow. It came after the Bank of England raised interest rates to a 27-year high and predicted a recession would hit before Christmas.
And, just last Friday, energy watchdog Ofgem announced its price cap would skyrocket to £3,549 a year for the average family from October 1.
Banking body UK Finance warns that cynical fraudsters are already profiting by posing as power companies.
Research by online protection firm McAfee found a 10% increase in scams targeting one of the “big six” energy companies in the first three months of the year, compared to at the same time last year.
Cifas, a fraud prevention service, warned last week that fraudsters were targeting households with emails claiming they had overpaid for their energy in 2020/2021 and asking them to fill out a form with their personal details and financial.
He said the emails used energy company logos and successfully bypassed spam filters.
Who? also alerted customers to emails claiming to be from Ofgem stating the recipient is entitled to a refund. It says households should be on their guard if they receive an email from [email protected]
Cifas adds that people in Kent and Stevenage were called by scammers claiming they were eligible for the Household Support Fund and asking for their bank details to process the claim. Yet no local authority would ever ask for this information over the phone.
Fraudsters posing as Ofgem
Stephen Ralph was offered fake energy discounts claiming to be worth £700
Stephen Ralph, 57, was targeted by scammers posing as Ofgem last week.
They sent the retired radiographer an email asking him to claim two energy rebates worth £700.
But while the email used the same orange branding as the Energy Regulator, Stephen was skeptical.
And when he spotted a line saying he should claim by September 2020, he knew something was wrong.
Stephen, who lives in South Ayrshire, said: ‘I am appalled that fraudsters are taking advantage of the cost of living crisis in this way.
Fraudsters also send emails and text messages offering bogus money-saving schemes, such as food giveaways and gas station gift cards.
A Money Mail reader received a scam call claiming to be from his mobile operator O2, claiming he was entitled to a 40% discount as a thank you for consistently paying his monthly bill on time. Since he pays by direct debit, he was suspicious and ignored subsequent calls.
Chris Ainsley, head of fraud risk management at Santander, says: “Criminals who commit scams are nimble at using what’s in the news or feeding off the current economic climate to prey on the hopes and fears of people. people.”
Meanwhile, banks say more and more customers are losing money after running for bargains on second-hand sites – which never happen. It follows a boom in online shopping scams after millions of people were forced to go online during lockdown, making them easy targets.
Matthew Farrar, senior fraud strategy manager at HSBC, said: “Fraudsters will take advantage of the rising cost of living to convince people to part with their money, and they are developing increasingly sophisticated ways to do it.
We urge customers to be wary of “too good to be true” offers or prices and to be wary of requests for payment by bank transfer only. »
A TSB spokesperson adds: “Financial strain can make people more vulnerable to fake offers, merchandise or refunds that turn out to be clever ploys to obtain personal information and access bank accounts.
Skyrocketing bills: Energy watchdog Ofgem has announced its price cap will skyrocket to a devastating £3,549 a year for the average family from October 1
“We’ve seen examples of customers falling victim to messages offering cost-of-living payments and discounts on energy bills.”
Investment scams are also a growing concern as savers are desperate for ways to make their money grow.
Data from Barclays revealed that fake investments now account for 32% of fraud losses, with the total sum stolen increasing by 15% in the second quarter of this year.
FCA figures show that investment fraud accounted for 58% of potential scams reported by consumers to the watchdog.
The pensions regulator also says the cost of living crisis means struggling savers are more susceptible to scams claiming to be able to access their money sooner.
AJ Bell’s head of pension policy, Tom Selby, said: “Unscrupulous fraudsters will try to take advantage of the vulnerability by any means possible, whether it’s offering early access to pensions or to push dubious investments promising exorbitant guaranteed returns.”
“Offers like these could be tempting for people facing inflation on the edge of double digits.
But the reality is that unless you are in poor health, early access to your pension will result in a huge tax penalty from HMRC.
Lloyds Bank has reported a more than 90% increase in scams on ‘up-front’ loans, which promise quick access to cash in return for an upfront payment. Victims lose over £200 on average.
The City’s watchdog is so concerned about loan scams that it has relaunched an awareness campaign.
Banking industry insiders also say cost-of-living pressures are driving more people to act as “money moulds” – where they rent their bank accounts to criminals who use them to handle stolen money.
Earlier this year, the Daily Mail revealed Britain was facing a fraud crisis, with losses reaching nearly £3billion a year.
We are campaigning for a major overhaul of the system, which includes the appointment of a Minister for Fraud.
To help spot a scam, free online training is available at friends againstscams.org.uk.
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