Text scams on the rise as fraudsters prey on households facing soaring energy bills

Fraudsters are exploiting the cost of living crisis by sending text scams that prey on households facing soaring energy bills, banks have warned.

UK Finance, the banking trade body, urged people to be vigilant after noticing a rise in the number of “smishing”, or SMS phishing, which are scams that impersonate energy companies. Recipients are told that their energy supply has switched to a new provider and that they should set up a new direct debit.

It comes as 27 energy companies have gone bust since August on the back of soaring wholesale gas prices, meaning millions of households have been transferred to new providers. Household energy bills will rise by almost £700 this year after Ofgem, the energy regulator, said earlier this month that it would lift the price cap by a record 55 per cent to £1,971.

'Ofgem would never sell you energy'

Ofgem also said it was also aware of fraudsters impersonating the energy regulator. It said: “Scammers may sometimes contact you pretending to be from Ofgem. For example, a scammer might say they are from Ofgem and suggest you switch and then ask for your bank details… These are energy scams. Ofgem would never sell you energy, ask for personal information.”

Fraudsters are also attacking victims via email and on the phone. In one case, the criminals impersonated Eon and told recipients that they had been overcharged and were eligible for an £85 refund.

They were asked to follow a link that took them to a webpage that mimicked an Eon login page. Scammers were then able to steal personal details. Eon said: “We’ll never ask you for personal information, like passwords, payment details or your address.”

'Criminals are preying on concerns about energy bills'

UK Finance said: “It comes as no surprise that criminals are preying on concerns about energy bills. We know already that they are advanced in their scale and level of sophistication.”

It is just the latest front in a long running assault by criminals, who are adept at exploiting consumer trends to scam victims. During the lockdowns, for example, the number of scam texts that impersonated delivery companies soared.

These types of scams have soared in recent years and criminals have been able to operate largely with impunity. The Telegraph revealed on Wednesday that just 24 text scam cases were prosecuted by police last year despite more than 70 per cent of people saying they get at least one a month. Only seven resulted in a conviction.

The figures suggest that as many as 36 million are afflicted by text scams on their phones every month, with an estimated 6.5 million of those getting more than 10 every month.

Criminals typically carry out the attacks by using hundreds of cheap sim cards that they then plug into a machine known as a ‘SIM farm’. The equipment is used to send thousands of messages every hour to mobile numbers bought or stolen online.

Mobile phone networks have come under increased pressure to get a grip of the problem but criminals are still running rife on their networks.