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5 biggest cost-of-living scams tricking people out of money

Beware of scammers

cost of living scam
Rachel Avery
Rachel AveryHomes Editor
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The cost-of-living crisis has a lot of people worried this winter, and crafty scammers are preying on that worry. RegCarCheck have reported that "£1.3 billion was stolen in 2021 through authorised and unauthorised payments because of fraud".

RELATED: 10 genius ways to heat your home without paying for heating

Fraud Specialist James Baker at RegCarCheck has revealed the biggest cost-of-living scams that are targeting the UK, with advice on how to avoid them and what to do if you fall victim…

False promises of an energy rebate

Utility bills are a huge cause of concern this winter, and many people are confused about the government's rebates.

Scammers are preying on the UK’s fear and confusion by issuing text messages that offer financial support. Often, the (official looking) text will ask that you follow the link, answer a few questions, and submit your bank details to receive financial support. The scammers will then fraudulently take money from the account.

cost of living crisis

Be aware of scammers 

Any financial help from the government that contributes to the cost of your energy bills requires no action and will be automatically applied to your bill. If you’re still unsure, call your energy supplier from a phone number that is taken directly from a previous bill.

Fake car insurance

On average, the cost of driving has increased by 30% in the last year as the result of an increase in petrol prices, making it no surprise that drivers are seeking ways to save money where they can. Scammers are aware of this and subsequently, there has been a rise in the 'ghost broker', who is a fraudster masquerading as an authentic insurance broker offering fake car insurance.

To make matters worse, falling victim of ghost brokering may see you issued with a hefty fine or even points if you are pulled over without valid insurance, or unable to claim monies if you're involved in an accident.

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READ: 20 easiest ways to save money at home each month when you're on a tight budget

Ghost Brokers often post fake ads on social media channels, boasting premiums that are 100s of pounds cheaper than you have been quoted. They often use WhatsApp, DMs and even Snapchat to communicate, and claim to have great relationships with insurance companies that are household names. Car insurance companies will never use social media to communicate with you or advertise on the likes of university notice boards. When purchasing insurance remember that if it seems too good to be true, it probably is.

DVLA refund promises

The DVLA has issued warnings to drivers after a 20% rise in texts and emails circulating the UK that they have calculated a driver’s vehicle tax, and that they have overpaid and due a refund. This is in fact, false. Texts and emails can also claim that their payment details need updating and they are in debt to the DVLA which again, is false. Often, a person will update their card details, for the scammer to empty their bank account.

scam texts

Don't fall for texts that ask for you money

All refunds are generated automatically by the DVLA and the driver doesn’t have to submit any information to receive their refund. If you are still unsure if the text is genuine, contact the DVLA or visit Action Fraud to establish if they have issued a warning with regards to the text and/or email that you have received.

New number hoax

84% of students admit to feeling concerned with regard to their finances throughout the cost-of-living crisis. Scammers are praying on the parents of adult children by texting them to claim that they have a new number. It's here that the parent believes they are talking to their child when in fact, they are communicating with the scammer. The scammer then texts an elaborate story claiming to need money with the promise that they will pay it back.

If you receive this message, call the person that they are claiming to be on the number that you have previously held of them. It's here that they can confirm if it's a scam. Remember, the bank details that they give are unlikely to match the ones that you hold for the real person. Forward the text to 7726 and block the number.

Advance fee promises

Advance fee fraud refers to the act of a fraudster coaxing the victim to pay for a product or service in advance of receiving it. The product or service never materialises and often, the fraudster encourages the victim to issue another payment in the hope that they may receive it.

heating adjust

Scammers are using the cost-of-living crisis to entice victims 

This scam holds no bounds as victims can even travel to other countries believing that they will receive their service. Advance fee victims often believe that they are purchasing the likes of stocks or even Bitcoin. The temptation of topping up finances to aid in navigating a cost-of-living crisis can be too much for victims to resist as they grow more and more anxious.

Ultimate advice you need to know about reporting scams

Report scam text and phone calls to 7726. This is a free service that works to target scammers.

If you believe that you have been a victim of a scam, contact Action Fraud immediately on 0300 123 2040 who work to stop scammers.

Those that have been a victim of a scam are often embarrassed and refrain from telling those close to them. It’s vital to remember that there is nothing to be ashamed about as scammers are professionals at what they do and even those that are the most 'scam savvy', can fall victim.

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