Energy Supplier Scams: How to Avoid Them
If you are a customer of an energy supplier that has collapsed, you could be at risk of scammers.
Scammers are targeting the customers of collapsed energy suppliers, with criminals looking to exploit the ongoing cost-of-living crisis by posing as debt collectors.
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Former customers of suppliers who have gone bust, including Solarplicity, Future Energy and Northumbria Energy have been targeted by fraudsters who are attempting to exploit the confusion caused by the companies’ failures, according to research analysis by Which?.
Over the last 12 months, almost 30 suppliers have been pushed out of business after rising wholesale prices and the energy price cap caused firms to collapse.
What to look out for
Scammers are posing as debt collection firms and using phishing emails complete with consumers’ names and knowledge of their former supplier. The consumer group Which? analysed research by Action Fraud and said it was ‘concerned’ that customer information had been mishandled or even stolen.
As companies were wound down, data has been passed between energy brokers, mailing firms, new suppliers and debt collectors. Which? obtained figures from research conducted by Action Fraud, which show scams mentioning the biggest energy suppliers had risen 10% in the first four months of this year, compared with the same period in 2021.
There was a 27% increase in January alone compared to the same time in 2021.
Energy hikes are already having an impact on consumer’s mental health, so this will just be adding to the stress.
Soaring energy bills causing people to take bait
Scammers are working by posing as suppliers and encouraging victims to input their bank details into messages they send after being lured in. The scammers say that the customer can claim a refund due to a miscalculation of their energy bill, so many people facing soaring emerging bills are taking the bait.
Fraudsters have also been discovered impersonating legitimate government schemes to incentivise the use of renewable energy sources, through online scams, cold calling, or doorstep visits.
Britons looking to reduce energy bills by taking part in genuine schemes including using insulation and heat pumps are being targeted.
According to estimates by the Citizens Advice Bureau, around a whopping five million people may have been taken in by scams like these, giving away personal details and ultimately paying for services that never materialised.
It’s too easy to fall victim, says Which?
The money editor at Which?, Jenny Ross, said it would be ‘all too easy’ to fall victim to sophisticated scams which promise ways to reduce energy bills, or even offer refunds due to billing errors, as households continue to feel the squeeze of rising energy costs:
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.
Ross adds that, if you are in any doubt whatsoever, you should contact your energy supplier directly using the contact information on their website.
Annual bills are expected to reach nearly £3,000 this October as the energy crisis continues.
This week, regulator Ofgem was accused of creating a market ‘vulnerable to large-scale shocks’ by The National Audit Office.
What can landlords do?
50% of UK households are cutting back on their energy use and with another rise expected just before the colder months hit, households are going to struggle even more to make rent and bills.
Next time you speak to your tenants, check in to see if they are aware of these energy scams. It may be that your tenants haven’t heard of this and just letting them know could help them avoid falling into the trap. Making sure you speak to people about scams is the best way to spread the word and alert people to the dangers.
Don’t forget, if you are concerned about your tenants being able to pay both the rent and bills, you should invest in Rent Guarantee Insurance sooner rather than later!
