The scale of the UK cost of living crisis has become clearer after new Office for National Statistics data revealed wages had fallen by a record amount in real terms and CPI inflation had risen to an unprecedented 10.1% in July 2022.
With the cost of living now at a 40-year high, households are more likely to be struggling to afford the cost of energy bills, fuel prices and the price of groceries, with the situation likely to get worse this winter.
So what are the worst scams to look out for at the moment - and how can you avoid them?
How can you spot a scam?
Criminals have many methods of getting you to part ways with your hard-earned cash.
While some can be spotted from a mile away, others can be clever enough to catch you out.
According to Citizens Advice, there are several ways to keep yourself safe from scammers.
It says you should be on high alert if:
- Something sounds too good to be true
- You have been contacted by someone you don’t know
- There are signs you’re dealing with a fake company (e.g. they do not have an address)
- You are being told to transfer money urgently
- They are asking for an unusual form of payment (e.g. through iTunes vouchers)
- You have been asked for unusual personal information (e.g. passwords or pin numbers)
- There has been no written confirmation of what you agreed
If you think you have been scammed, halt all contact with the person or company that has contacted you (fraudsters tend to be the ones who initiate contact).
Get in touch with your bank immediately to cancel any payments and to tell them you think you have been a victim of fraud.
Citizens Advice has scam advisers who can help you if you are worried you have been caught out.
It runs a Scams Action helpline that can be reached on 0808 250 5050.
The Action Fraud website can also help.
For people in Scotland, you can use the Advice Direct Scotland website or report a scam directly to the police via 101.
What are the cost of living scams to look out for?
There are six main scams that are currently doing the rounds.
NationalWorld has put together a quick explainer on each of them.
DWP cost of living payment scam
The biggest scam being reported online involves fraudsters posing via text message as the Department for Work and Pensions or the UK government more generally.
These texts urge people to contact a fake number in order to provide details that will enable the government to send you your cost of living payment.
Sometimes, fraudsters have also sent a follow-up email.
However, you do not need to do anything to receive the cost of living payment, so don’t respond or click through on the number.
Council tax rebate scam
According to Money Saving Expert, several councils and the Local Government Association have reported that people have been receiving cold calls about the council tax rebate.
The criminals are reportedly telling people they need to have their bank or card details to get the money across to them.
However, most people paying their council tax bill via direct debit should have received their rebate by now, and those who are not doing so will have been asked to fill out their details using a secure online form.
If you’re unsure about what to do, contact your local council directly.
Ofgem energy rebate scam
Ofgem has warned energy suppliers to tell their customers to ignore a scam text purporting to be from the energy regulator.
The text reportedly tells people to apply for a £400 rebate, and might ask you to do so by clicking on a link.
Cold callers have also been said to have asked people for their bank details to process the payment.
However, Ofgem has nothing to do with the energy bills rebate announced by Rishi Sunak in May.
The money is being paid to your energy supplier by central government and will only be seen through a reduction to your energy bills over a six-month period, so you do not need to do anything to receive it.
Fuel gift card scams
Fuel prices have been rocketing for several months as a result of the Russia-Ukraine war.
It has led to several fake social media ads and scam emails, including a BP fuel card scam on Facebook that offers people the chance to get 200-litres of fuel for just £1.78.
Another scam involves an email purporting to offer a $500 shell gift card that can be claimed by taking part in a bogus survey before a tight deadline.
Fake celebrity investment scams
According to consumer site Which? there has been a surge in fake investment scams involving well-known faces.
Given his position as one of the UK’s most trusted financial experts, Martin Lewis is often used in fake investment ads.
The Money Saving Expert sued Facebook in 2019 for not doing enough to tackle these scams, but they are still doing the rounds on social media and via email and text.
Holly Willoughby, Philip Schofield, Deborah Meaden, Sir Richard Branson, Piers Morgan and Gordon Ramsay are other famous faces who are being used to scam people.