5 big cost of living scams to watch out for

Scams including fake cost of living payments, energy rebates and phoney competitions are growing as fraudsters try to capitalise on the cost of living crisis.

The surge in cost of living scams comes as a report by think tank the Resolution Foundation, in collaboration with the abrdn Financial Fairness Trust, found that 1.3 million families had no savings before the biggest cost of living crisis. The report warned that some will become reliant on friends and family when it comes to unexpected costs while others won’t have any means of coping.

We’ve listed five of the biggest scams circulating right now with advice on how to spot, report and avoid them.

Sign up for free Which? scam alert emails to find out about the latest scams news and advice.

1. Fake cost of living payments and energy rebates

The government's cost of living scheme was announced in May and offers £650 to millions of low-income households, with the first installment of the money transferred from 14 July 2022. The second payment will be issued in the autumn. 

The Department for Work and Pensions has issued a warning about scams regarding cost of living payments as well as energy and council tax rebates.

One of these scams comes as a text message asking you to claim or apply for the payment. These have been followed by emails circulating asking you to call a fake number to make a claim for the payment.

Don't be tempted by these texts or calls, most payments will be automatically transferred to you and you can find out if you’re eligible here. 

The government is also providing every household in the country with a £400 energy grant. You will receive this as a credit on your energy bill in October 2022. A £150 council tax rebate, which will be made directly by your council into your bank account or arranged by your local council contacting you, has also been offered from April 2022.

People have also reported receiving cold calls offering the £150 energy council tax rebate. The scammer then asks for your bank details to process the payment. The Local Government Association has said that councils will not call you asking for your bank details. 

The energy rebate will be processed automatically for those who pay their council tax via direct debit. Anyone who doesn't pay via direct debit should await a letter from their local council with instructions on how to claim the energy rebate. 

2. Bank card refund scam

Scammers are using social media to offer you fake bank refunds. This scam shares a fraudulent screenshot showing amounts from £1,289 to £1,855 being deposited into someone’s account.

The screenshot is shared next to a message that reads:

‘NEED PEOPLE WHO BANK WITH BARCLAYS’

‘Refunds on debit card purchases for last 18 month. £500 - £20k. Each customers refund will be different.

‘Message me now and il make you UP TO £15,000 profit for YOURSELF today. You only send my cut once jobs complete

‘50-50 cut. Paid same day. Everything is done on the Barclays banking app.

‘Only customers can send money through the app. So I have to trust people to pay when it’s time.’

This scam tempts you into parting with your bank details, which the scammer will use to set up their device on your account, giving them access to your bank account.

The scammer then uses the banking app to dispute a transaction and get a refund.

3. Morrisons food giveaway

The supermarket Morrisons has been spoofed in a fake ad on Facebook offering free boxes of food worth £30.

The fake ad states: ‘We have thousands of food products due to expire, normally it would be binned however we thought we’d change our ways and start doing things a little better as we know times are tough at the moment.

‘Instead of throwing it all away we will be packing it into boxes and sending everyone who shares+comments in the next 24 hours each a box containing some food worth up to £30. (Sent next day)’

This is a scam we've seen serval times, often impersonating popular brands with tempting giveaways. The scam usually sends you to a website to share your personal or financial details.

If you see a tempting offer, check a brand’s official social media page or website to see if the post is authentic. 

Morrisons confirmed on its official Facebook page that this post isn't genuine and that it only posts offers like these from its official Facebook page.

4. Petrol gift cards

Amid rising fuel prices, fake social media ads offering a BP fuel card for just £1.78 have been taking advantage of the crisis.

We've seen a number of reports of people receiving emails from 'mdmottakin669@gmail.com' advertising a non-existent $500 Shell petrol gift card.

The email reads:

‘$500 Shell Gas Available - Claim Now!’ ‘Congratulations! You’ve been chosen to receive a brand new $500 Shell Gift Card!

‘To claim, simply answer a few quick questions regarding your experience with us. Attention: This survey offer expires today, July, 7, 2022.’

It then asks you to complete a survey for the fake gift card. 

5. Fake investments

Scammers often use fake endorsements to lure people in. This scam sees Martin Lewis, founder of Money Saving Expert, impersonated in an ad on Facebook to trick you into clicking on links with fake financial advice.

The ad says: ‘Lewis announces its latest findings and banks are freaking out!’.

The ad leads to a fake news article that claims to offer a cryptocurrency investment scheme called BitProfit and includes a form to fill in to get money from this fake offer. 

Which? has reported this ad to Facebook and the website to the National Cyber Security Centre (NCSC).

Reporting a scam

The most effective way to stop scammers in their tracks is to report a scam when you see one.

How to report scams:

• Facebook: select the three dots on the top right-hand corner of the ad and select ‘Report ad,’ before pressing ‘Misleading or scam’.
• Websites: report a suspicious website to the NCSC.
• Emails: forward scam emails to report@phishing.gov.uk. You can also select the ‘Report Spam’ on Gmail, the ‘Report phishing’ button on Hotmail and send scam emails to abuse@yahoo.com on a Yahoo account.
• Text messages: forward scam texts to 7726, a free reporting service provided by telecoms companies.
• Phone calls: you can also report scam calls to your mobile to 7726.

You can also report scams to Action Fraud or the police if you live in Scotland.

If you have been a victim of a scam and lost money or given away personal details, contact your bank straight away and report the scam to Action Fraud.