Scammers Prey on Cost of Living Crisis to the Tune of Nearly £8 Billion
More than seven in 10 (73%) UK consumers have been targeted by fraud in the past three months, amidst the rising cost of living, according to information and insights company TransUnion.
Whilst consumers are becoming more vigilant, increasingly sophisticated scams have led to more than one in four (26%) falling victim, with total financial losses of over £7.9 billion since the beginning of May.i
Common scams include fake tax rebates that are supposedly from the government (38%), bogus energy companies offering a discount (38%), offers which claim to be from insurance companies promising a cheap deal (37%) and phoney social media competitions offering free holidays (36%).
Fake investments are also common, with scammers using sham endorsements to lure people in. More than a third (35%) of consumers have been targeted by false cryptocurrency schemes promoted on social media, with what appear to be testimonials from celebrities.
Kelli Fielding, TransUnion’s managing director of consumer interactive, explains: “We know fraudsters prey on our fears and worries, and the cost of living crisis is providing them with the perfect opportunity, giving rise to an abundance of scams. The average financial loss is £581, which is actually around half of what it was last year,ii but sadly the sheer volume of fraud and the increasingly convincing nature of the scams means more people have fallen victim, rising from 14% last yeariii to 26%.
“Our research showed around half (51%) of consumers say the increased cost of living has made them more vigilant towards fraud, which is good news, but we’d encourage everyone to be extra cautious and treat any unexpected text message, email or phone call as a potential phishing attempt. If you’re being asked for your bank details or other personal information, consider this a red flag and, if in doubt, check with the company directly by calling their official phone number.”
Nearly one in three (32%) consumers agree banks and finance providers are doing more to warn people about new scams – either by sending out alerts when money is being transferred, flagging the latest scams or building in authentication systems to make them think twice before paying for something. Yet the same number (32%) say more education is needed to help stamp out digital fraud.
Among all adults, close to half (46%) would contact their bank or finance provider if they’d been targeted or fallen victim to a scam and over a third (34%) would alert the legitimate company the fraudster was pretending to be from. Others said they would report scams to Action Fraud, the police or an industry regulator such as the FCA, Ofcom or Ofgem. Over a fifth (21%) would check their credit report to spot evidence of the scam.
Kelli Fielding continued: “It’s great to see people are keeping an eye on their credit report for signs of fraud. Your credit information gives a full picture of your credit history so if someone else has fraudulently used your identity to apply for credit, it will be visible here. Regularly checking your credit report helps you monitor and manage your financial health – so it’s important to identify anything that doesn’t look right so you can get it corrected.”
TransUnion’s tips to help reduce cost of living fraud:
· If it seems too good to be true, it probably is! For example, scammers pretending to be companies offering unlikely discounts or unusual offers, such as a free holiday or an investment with a guaranteed win
· Be wary of telephone calls, messages or emails offering a rebate or refund – typically scammers are pretending these are from energy companies or HMRC. Do not follow any links but if you think it may be genuine then call the organisation directly on their official number and ask for information
· Avoid clicking links or downloading attachments from unexpected emails or messages from a brand or business, unless you’re sure you know the origin. These could release malware onto your device or steal your bank details. It’s okay to ignore emails or messages that are unsolicited
· Check the webpage is genuine. When online, make sure the webpage you are visiting is HTTPS protected or shows a padlock – both of which can be spotted in the domain bar. This indicates that it’s secure
· Regularly check your credit report. This will help you to understand and protect your financial standing. It can also help you monitor for fraudulent activity as if someone tries to use your identity, this is one of the places you’re likely to spot it. You can check your TransUnion credit report and score for free with Credit Karma, Credit Monitor from MoneySuperMarket, or TotallyMoney
· Report fraud to Action Fraud if you think you’ve been a victim. Or if you’ve received an email which you’re not quite sure about, you can forward it to the Suspicious Email Reporting Service at: firstname.lastname@example.org
i 26% of UK consumers have fallen victim to a scam, at an average of £581. According to latest ONS figures, the current UK adult population is 52,673,433, which means 13,695,092 consumers have collectively accumulated a loss of £7,956,848,452
ii TransUnion research in May 2021 surveyed 2,000 UK consumers and found the average financial loss of those who had fallen victim to fraud was £1,149
iii TransUnion research in May 2021 surveyed 2,000 UK consumers and found that 14% had fallen victim to fraud since the pandemic began