Which? reveals huge jump in energy-related scams as fraudsters seek to exploit cost of living crisis

As the cost of living crisis continues to put millions of households under increasing financial pressure, scammers are exploiting fear and confusion around soaring energy bills to ramp up their use of energy-related scams.

In the first quarter of this year, figures from Action Fraud obtained by Which? show scams mentioning one of the big six energy firms had risen 10 per cent when compared to the same period last year. January alone saw a 27 per cent year on year increase. Which? believes the true figure is likely to be even higher, as many scam attempts go unreported.

One of the most common methods Which? has seen used by scammers is phishing emails, in which a scammer posing as an energy supplier emails the customer inviting them to claim a refund, due to a miscalculation on their energy bill. 

A common example of this saw a fraudster posing as major supplier Eon, offering a rebate of £85. In order to claim this, the recipient was then instructed to click a link and input their bank details. These emails can often look legitimate, especially if the scammer has ‘spoofed’ the email display name so it appears to be coming from an official account. 

The collapse of several small energy firms has also created an atmosphere of confusion around outstanding bills, with scammers utilising this uncertainty to pose as debt collection firms. Which? received two such reports from former customers of Brilliant Energy, which saw the individuals concerned receiving highly sophisticated phishing emails, including their names and knowledge of their former supplier, more than two years after the company had been wound up. Reports suggest that customers of defunct firms including Solarplicity, Future Energy and Northumbria Energy have been similarly affected.

Which? is particularly concerned by the opportunities for customer information to be mishandled or stolen as companies are wound down and personal data passes between energy brokers, mailing consultants, new suppliers, debt collectors and other third parties. 

For those proactively looking to reduce energy bills via green home improvements, there have been a number of government grants rolled out in the past few years to incentivise purchases including insulation, heat pumps and more. Fraudsters are also taking advantage of various government grants set up to incentivise take-up of insulation, heat pumps and other products by impersonating legitimate schemes online, via cold calling and even on the doorstep. Research from Citizens Advice suggests around five million people may have been taken in by such scams, paying for services that never materialised. 

Action Fraud has also warned of a scam which sees criminals cloning prepayment meter tokens with credit pre-loaded, and then selling these on at a cut-rate price. In theory, those purchasing the cloned meter tokens could make significant savings (for example £100 of credit purchased for just £50), but in reality victims will end up paying for their energy consumption twice, once their legitimate supplier establishes what is happening.

Which? has also seen examples of energy-related investment scams. A consumer recently reported a scam email purporting to be from SSE, promising modest and therefore seemingly legitimate interest rates of 1.75 per cent to 3.74 per cent on a fake ‘sustainability-linked bond’. 

Scammers are increasingly using highly sophisticated methods to target their victims and prey on concerns around rising costs, with their messages often looking like genuine communications from energy suppliers. 

It’s vital that businesses take steps to differentiate their genuine communications from scams by following best practice. To help firms protect their customers, Which? is calling for firms to sign up to its SMS best practice guide, which offers guidance on how businesses can build customer trust and strengthen communication security.

Jenny Ross, Which? Money Editor, says:

“As households continue to feel the squeeze of rising energy costs, it can be all too easy to fall victim to sophisticated scams promising ways to reduce energy bills or even offer refunds due to a billing error.

“We advise all consumers to be wary of unsolicited emails, texts or letters, especially those not addressed to you by name, which might request sensitive information or ask you to complete a bank transfer. If in doubt contact your energy supplier directly using the contact information on their website.

“Which? also encourages energy suppliers to sign up to our SMS best practice guide for businesses, to make it easier for consumers to spot scam texts impersonating suppliers.”

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