Energy Scams: How to Protect Yourself

There is an energy crisis blowing in Europe and there are no signs of it stopping soon. As winter beckons, many households are faced with tough choices as the cost of energy has skyrocketed. Energy plays a critical part in our lives, and when it's limited, especially after the Russia-Ukraine conflict and subsequent fallout, panic starts to creep in. 

And that’s where scammers take advantage. Amidst the panic and chaos, scammers are stealing from unsuspecting citizens. The ever-rising cost of living is not helping matters as people with stretched budgets are looking for every means to save.

How governments are helping

Across Europe, governments are succumbing to pressure from the public and are introducing energy grants and other relief schemes. In the UK, households are expected to get a one-off grant of £400. The best part is, the grant does not need to be repaid and is applied automatically to bills as long as the household has an electricity meter.

Previously, the UK government had yet another program dubbed “heat now, pay later” where households would get £200 which would be clawed over 5 years. Other measures include the £650 one-off grants for households on means-tested benefits which were spread across two payments.

In Germany, workers are to expect a €300 taxable payment to help with the rising energy costs. The Energiepreispauschale or EEP is to be paid directly to people’s bank accounts and there is no need for them to apply.

In the Netherlands, the government is offering energy subsidies of €190 in the coming months and also plans to introduce a price ceiling on energy to help ease the burden on households.

How energy scams work

With all the help and grants coming about, scammers have devised new methods to con the public. Since most of the grants and relief schemes are new and the information is scarce, scammers are luring unsuspecting households into traps. 

In most of the government schemes, citizens don’t have to do much as either the relief is applied to their energy bills, like in the UK, or deposited directly into the customers' bank accounts like in Germany. But due to either anxiety or panic, most people are rushing into emails and messages telling them they need to apply for energy bills.

Most of the recently reported cases involve phishing attempts as scammers send enticing emails about how to apply for grants. All they are after is your bank details or credit card information.

Which energy scams to look out for

Apart from phishing, there are other ways that scammers are trying to get your hard-earned money. Here are some of them:

Energy-saving devices

Ever heard of an energy-saving device that can shave a whopping 90% off your bill? Well, this has been a common marketing trick used by dubious products that can hardly function.

One such product is Voltex, which was previously named Moltex. Moltex products were taken off the market for “security reasons” which does little to boost the confidence of users. According to Which?, they tested a few of the products on Amazon but none passed the basic security test. Most are a risk to your safety and well-being as they can cause fires or electric shocks.

Consumer Tip:

To avoid falling for such products, always ensure that the energy production has a CE/UKCA label. The label means the products have met the regulatory standards and are safe to use.

Dubious refunds

Perhaps one of the most common types of energy scams is fake refunds. It has been widely reported that scammers are impersonating popular energy companies like Eon, EDF, or SSN claiming that you have a refund.

It all starts with emails reading; “Our system indicates that an error in our billing procedures has led to an overcharge” With refunds of up to £85, some users are enticed to do what the scammers want them to do; clicking on the link provided. They fill out the so-called refund forms and give vital information like bank details. This opens a backdoor for scammers who can gain sensitive details.

The emails are sent en masse, which means some of the recipients are not customers of the said suppliers. The scammers hope that some of the recipients are customers and will not bother checking the email.

Consumer Tip:

Keep in mind that your energy supplier has your bank details and if they were to issue a refund, they would use it rather than ask you to send the details. 

Green Energy Scams

Green energy scams are becoming as popular as investment scams. They have a lot in common and if users are not careful, can easily become scam victims. In most cases, it all starts with an email detailing how Green Energy is the next big thing and how you could stand to benefit immensely. 

Some scams go as far as copying logos of popular energy suppliers like SSE and give believable interest rates of 1.75% to 3.74%. According to Which?, one of them even mimicked US bank Wells Fargo claiming they are behind the bond.

Since some of the scams are quite sophisticated and very convincing, it's always wise to do your due diligence before committing.

Consumer tip:

Before committing to any Green Energy investment, be sure to consult with your financial adviser. On top of that, you can always check if the company is registered and licensed, for instance, through FCA’s Register. Check if the contact details match with the domain and whether they are using Gmail, Hotmail, or any other free email.

Fake online firewood stores

In recent times, we have observed an increase in the number of fake stores selling firewood and pellets. Most of the websites claim to sell immediately usable firewood with free delivery. Some of the countries are the Netherlands, Germany, France, and Belgium.

The Dutch police have been reporting tens of such websites and are urging users to be extra careful. In some cases, like holzdestock[.]com, the sites are in a foreign language and loosely translated into the local language. The website seems to be operated in Germany but is insinuating that they are from the Netherlands and are using the Dutch language. 

After ordering from such sites, consumers are complaining of never receiving the products. 

Consumer tip

Before ordering from any online store, it's prudent to do your due diligence. Watch out for clues like bad language, over-ambitious promises, and too-good-to-be-true promises. You can also check your local police website for any alerts and cautions that may have been issued.

Final comments

Due diligence is advised before opening any energy-related emails claiming to offer you refunds or grants. Most governments in Europe are either sending money directly into consumers' bank accounts or deducting the grants from monthly bills. Hence anyone asking you for details like your bank account or address should be viewed with caution. Avoid clicking on suspicious links or emails whose sender tries to mimic your energy service provider. 

Stay safe! Stay warm! Avoiding getting scammed!

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