Beware of the scammers who prey on YOUR cost of living fears

Major high-street banks are today sounding the alarm about a looming fraud epidemic, as cruel scammers target people who have become “emotional and panicked” by the rising cost of living.

Banking giants like Barclays, HSBC and Santander are urging customers to be extra vigilant as crooks take advantage of economic uncertainty.

Financial regulators and consumer groups have also issued strong warnings amid a wave of scams exploiting households’ financial vulnerabilities.

Online Scams: Banking giants like Barclays, HSBC and Santander are urging customers to be extra vigilant as crooks take advantage of 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 one is more emotional.

“Scammers want us to operate on the emotional side – the one that makes us panic and make decisions without really thinking.

“When people worry about their finances, they get into this emotional state that’s a gift to scammers.”

Earlier this month, the Daily Mail revealed that households face a £6,000 increase in their bills this winter as energy bills, food prices and mortgage repayments soar. It came after the Bank of England hiked interest rates to a 27-year high and predicted a recession ahead of Christmas.

And just last Friday, energy watchdog Ofgem announced that its price cap would rise to a devastating £3,549 a year for the average family from October 1.

Banking association UK Finance warns cynical scammers are already making money by posing as energy companies.

Research by online protection firm McAfee reported a 10 percent increase in the number of scams citing one of the “Big Six” energy companies in the first three months of the year compared to the same period last year.

Cifas, a fraud prevention service, warned last week that scammers are targeting households with emails claiming they overpaid for their energy in 2020/2021 and instructing them to fill out a form with their personal and financial information.

It was said the emails used energy company logos and managed to bypass spam filters.

The? has also alerted customers to emails claiming to be from Ofgem stating that the recipient is entitled to a refund. It states that households should be alert when they receive an email from [email protected]

Cifas adds that people in Kent and Stevenage have been called by crooks claiming they were entitled to the Household Support Fund and asked for their bank details in order to process the application. But no municipality would ever request this information over the phone.

Scammers posed as Ofgem

Stephen Ralph has been offered £700 worth of fake energy discounts

Stephen Ralph has been offered £700 worth of fake energy discounts

Stephen Ralph, 57, was targeted by scammers posing as Ofgem last week.

They emailed the retired radiographer urging him to apply for two £700 energy rebates.

But even though the email used the same orange branding as the energy regulator, Stephen was skeptical.

And when he spotted a line that said he had to make the claim by September 2020, he knew something was wrong.

Stephen, who lives in South Ayrshire, says: “I am appalled that scammers are taking advantage of the cost of living crisis in this way.”

Scammers also send out emails and text messages with fake money-saving programs, such as free meals and gas station gift cards.

A Money Mail reader received a fraudulent call pretending to be from his mobile operator O2, saying he was entitled to a 40 per cent discount as a thank you for consistently paying his monthly bill on time. Since he paid by direct debit, he was suspicious and ignored further calls.

Chris Ainsley, head of fraud risk management at Santander, says: “Criminals who commit fraud use news or feed off of the current economic climate to prey on people’s hopes and fears.”

Meanwhile, banks say more customers are losing money after racing to snag bargains on second-hand sites — which never arrive. It follows a boom in online shopping scams after millions went online during lockdown, making them easy targets.

Matthew Farrar, Senior Fraud Strategy Manager at HSBC, says: “Fraudsters will take advantage of the rising cost of living to convince people to part with their money and they are coming up with ever more sophisticated ways to do so.

We urge our customers to be suspicious of offers or prices that seem too good to be true and to be wary of requests to pay by bank transfer only.’

A TSB spokesman added: “Financial pressures can make people more vulnerable to fake deals, goods or refunds, which turn out to be clever tricks to steal personal information and gain access to bank accounts.

Rising bills: Energy watchdog Ofgem announced its price cap would rise to a devastating £3,549 a year for the average family from October 1

Rising bills: Energy watchdog Ofgem announced its price cap would rise 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 living expenses and discounts on utility bills.”

Investment fraud is also a growing problem as savers look desperately for ways to stretch their money further.

Barclays data has revealed that fake investments now account for 32% of fraud losses – with the total stolen up 15% in the second quarter of this year.

Figures from the FCA show that investment fraud accounts for 58 percent of potential scams consumers have reported to the regulator.

The Pensions Regulator also points out that the cost-of-living crisis means savers are in trouble and at increased risk from scams who claim they can access their money early.

Tom Selby, Head of Retirement Policy at AJ Bell, says: “Unscrupulous scammers will try to exploit the vulnerabilities by any means, from early access to pensions to shady investments that promise sky-high, guaranteed returns.

“Offers like this could be tempting for people with double-digit inflation.

But the reality is that unless you are seriously ill, taking your pension early will result in a huge tax penalty from HMRC.

Lloyds Bank reported a more than 90 percent rise in “advance fee” loan scams that promise quick access to cash in exchange for an upfront payment. Victims lose more than £200 on average.

The city regulator is so concerned about loan fraud that it has launched a renewed awareness campaign.

Banking insiders also say the pressure on the cost of living is enticing more people to operate as “money mules” – where they rent out their bank accounts to criminals who use them to deal with stolen cash.

Earlier this year, the Daily Mail revealed the UK is facing a fraud crisis, with losses approaching £3billion a year.

We are campaigning for a major overhaul of the system, which includes appointing a Fraud Minister.

To spot a scam, free online training is available at Friends Against Scams.org.uk.

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