The cost of living crisis and soaring gas and electricity bills mean many of us are being contacted about energy more frequently.
It would be perfectly natural to open the latest email or text message that seemed to finally carry some good news, saying you’re owed a refund, but chances are it’s a scam designed to trick you into parting with your hard-earned cash.
In an attempt to help households cope with rising energy costs, there have been several government grants and discount schemes, alongside a flurry of communication and money-saving tips from energy companies.
And this is where scammers have spotted an opportunity.
All-too realistic
In one scam, fraudsters posing as major supplier Eon claimed that the recipient was entitled to an £85 refund.
‘Our system indicates that an error in our billing procedures has led to an overcharge,’ the email announced, before urging you to click on a dodgy link and enter your banking details.
The message might have the right letterhead or the same font as Eon – but your real energy supplier already has your payment details and so will never send an unsolicited email or text requesting these.
When Which? asked police fraud reporting unit Action Fraud about energy-related scams, it revealed crime reports that mentioned one of the ‘big six’ energy suppliers (British Gas, EDF, Eon, Scottish Power, SSE and the now defunct Npower) rose 10% in the first quarter of this year compared with the same period last year.
January 2022 saw a 27% increase in reports of these crimes, when compared with the previous January.
However, the worst thing is that this is very likely to be a drop in the ocean of the energy-related scams taking place across the country, as many incidents are never reported.
We’ve also heard of scammers posing as debt collectors in order to exploit the billing confusion that has followed the collapse of many smaller energy companies in recent years.
Customers tell us they have been contacted out of the blue by fake debt collection agencies claiming they had outstanding balances with their former – now bust – supplier.
These scam emails addressed each customer by name and contained accurate details about their former supplier, making them extremely convincing.
How do the criminals know customers’ names? The fact of the matter is that as companies are dissolved there are plenty of opportunities for customer information to be mishandled or stolen as personal data passes between energy brokers, new suppliers, debt collectors and other third parties.
If your energy supplier ceases trading, it will get taken over by an Ofgem-appointed firm, which manages your account and acts as a point of contact for verifying any payment requests you then receive.
Communications about outstanding balances or credit should be sent out a few months down the line, not out of the blue three years later, as in the cases we have seen.
Both of these are examples of phishing scams, so-called because fraudsters try their luck by contacting you randomly to get you to bite and hand over personal details so they can steal your money.
However, it’s not just emails and text messages. Scammers aren’t beyond cold-calling and even turning up on your doorstep.
In some cases, they have exploited government grants rolled out in the past few years to incentivise take-up of insulation, heat pumps and other products to help homeowners make their property more energy efficient.
Criminals impersonate legitimate schemes either by knocking on your door, calling you or setting up fake websites. If you are taken in, you end up paying for tradespeople who never turn up or do a shoddy job. By then of course, you have transferred a substantial amount of money to a criminal who also has your address.
Firms must fight back
We know scammers will do everything they can to trick people and it can be hard to tell whether a communication is genuine or not.
At Which? we believe part of the problem is that businesses don’t do enough to ensure their legitimate communication is difficult to imitate.
It’s vital that firms take responsibility for protecting their customers. This means consistently addressing customers in the same way, and using verifiable email addresses and domains for links included in a message.
Companies should avoid using links that go to log-in or payment pages, as scammers mimic this.
Fallen victim to a scam?
If you think you have already given your details away to a potential scammer, you should contact your bank immediately. You should also report the scam or any scam attempt to Action Fraud.
If your money has been stolen as the result of a scam, you can also report it to the police by calling 101.
Not every report results in a police investigation, but any information that you are able to give will help to build a clearer picture of how scams work, and who is behind them.
Reena Sewraz is senior editor at Which? Money.
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