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Energy scams you need to be aware of as cost of living crisis bites

·Finance Reporter, Yahoo Finance UK
·5-min read
energy scams File photo dated 03/02/22 of an online energy bill, as the biggest jump in domestic energy bills in living memory has come into effect as charities warn that 2.5 million more households are set to fall into
UK households are a facing a huge rise in energy scams. Photo: PA

The collapse of several small energy firms has left many people confused around outstanding bills, with scammers taking advantage of this to trick unsuspecting victims.

Energy scammers will typically claim to be from an energy company — either the "Big Six" or a small independent company — or Ofgem, the UK electricity and gas regulator, and try to mislead customers in a number of ways.

With fraudsters cashing in on the cost of living crisis, here are the most common energy scams that you need to be aware of.

Phishing emails

Scammers are targeting consumers with “phishing” attempts designed to harvest personal information, including bank details, which can then be used to carry out more sophisticated frauds.

One of the most common methods seen by consumer group Which? are emails from scammers posing as energy suppliers inviting customers to claim a refund due to a “miscalculation” on their energy bill.

Read more: Energy scams jump 10% as fraudsters exploit cost of living crisis

The emails look like genuine communications from energy suppliers, as the scammers “spoof” the email display name, so it appears to be coming from an official address.

In order to claim the rebate, customers are invited to click a link and input their bank details. Other phishing scams in circulation relate to the government’s £15bn energy help package.

Cloned prepayment meter tokens

Action Fraud, the national reporting centre for fraud and cyber crime, has warned of a scam where criminals clone prepayment meter tokens, and sell these on at reduced prices.

People are offered a cut price deal on their doorstep, for example £50 of electricity meter top-up for a cash payment of just £25. However, energy companies detect that they have not received payment for energy used, and the customer ends up paying for the energy twice — first to the fraudsters and then to their energy company.

The perpetrators of these electricity scams are believed to have links to serious organised criminal activity, and electricity companies are urging their customers not to get involved.

More than 110,000 households have been affected by this crime already.

Call scams

Scammers will call claiming to be a representative of the victim’s local utility company or energy provider. They will insist the customer is behind on their electricity bill payments and often threaten to cut off the electricity or natural gas immediately.

Read more: Five new scams to watch out for and how to protect yourself

More sophisticated scammers can even spoof, or replicate, the phone number that appears on your caller ID to make it look like it’s coming from your energy provider.

Always be suspicious of threats to cut your power immediately without payment or fuzzy details about your agreement with energy provider.

Fake refunds

Which? said it had come across a scam where a fraudster posing as major supplier E.ON (EON.BR), offering a rebate of £85. In order to claim this, the victim was then instructed to click a link and submit their bank details.

The sender's name was 'E.ON GAS REFUND' — another example of this scam uses 'E.ON PAYMENT REFUND' — but it has nothing to do with the energy provider. The email address is actually random and not E.ON's.

The email includes a link that takes you to a mock up of the E.ON website's login page. It then asks for several personal details and ends by loading the real E.ON website.

Read more: Cost of living: 7 ways to cut the cost of petrol

Which? made a step-by-step video of the scam so you can see the tactics scammers used to try and get £1000.

Green investment scams

Which? has also seen examples of green energy-related investment scams. A consumer reported a scam email purporting to be from SSE (SSE.L) , promising modest and therefore seemingly legitimate interest rates of 1.75% to 3.74% on a fake "sustainability-linked bond".

Debt collectors

The collapse of several small energy firms has also created confusion around outstanding bills, with scammers utilising this uncertainty to pose as debt collection firms.

In January 2022 Which? received two reports from former customers of Brilliant Energy, which ceased trading in 2019. Both had received an apparent debt demand from one ‘ABD Debt Recovery’, claiming they had outstanding balances on their Brilliant accounts.

The emails addressed each customer by name and showed knowledge of their former supplier. Online reports indicated that ex-customers of defunct firms Solarplicity, Future Energy and Northumbria Energy have also been individually targeted.

Read more: Action Fraud warns over energy bill rebate text scam

Which? said it was difficult to pinpoint the source of the leak because, as is common when energy firms cease to trade, customer data passes through many hands. These include energy brokers, mailing houses, new suppliers, billing consultants and debt collection agencies.

Jenny Ross, Which? money editor, said: “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."

Watch: Fraudsters are busy sending scam text messages