For the fifth instalment of our cost of living campaign with NatWest we’re looking at five scams SMEs may fall prey to.

The rising costs for businesses has created golden opportunities for scammers so keep reading to get scam savvy.

Citizens Advice reports that more than 40million people have been targeted by scammers this year – a 14% increase on last year. Meanwhile, Action Fraud has obtained figures from Which?, revealing crime reports mentioning one of the ‘big six’ energy suppliers rose 10% in the first quarter of this year, compared with the same period last year.

Here are some of the most common new scams businesses need to be aware of:

1. Energy-saving devices

Businesses looking to save on energy bills could be targeted by fraudsters selling hardware solutions to rising energy costs. Which? says it found “no evidence” any of the devices it tested would shave money off energy bills.

What to do

Look for a CE/UKCA marking on the product to ensure the item meets safety standards before plugging it in.

If you believe you’ve been duped, stop using it immediately.

If you paid by credit or debit card, you may be able to claim a refund using chargeback or Section 75 of the Consumer Credit Act.

2. Insurance broker fraud

Fraudsters are posing as insurance brokers and offering unrealistically good deals. These “ghost brokers” take payment for cheap insurance policies but never actually arrange cover. More than 500 cases of ghost broking, with losses totalling £1m, were reported to Action Fraud in 2021.

What to do

Beware of brokers advertising cheap deals on social media or unsolicited approaches via text.

Search the FCA website database for the name of the firm. All legitimate insurance broking businesses within the UK should be registered with the FCA.

If you believe the firm is bogus, report it to the FCA and Action Fraud.

3. Bogus debt collectors

The collapse of many energy companies has created billing confusion. If your business has been affected by a change in energy provider, you could be targeted by fake debt collectors demanding non-existent outstanding payments.

What to do

Contact your energy provider to ask whether there is an outstanding debt on your account.

Be suspicious if the collector asks for information in relation to your supposed “debt” – if legitimate, it is likely it has access to this information already.

Don’t be strong-armed into make an immediate payment and research the debt collector online for their company information.

4. Shopping vouchers and discounts

Several major supermarkets have warned customers about fake voucher offers that are preying on cost of living fears. A link in a bogus email, text or social media post will take someone to a survey, which asks for personal details such as log-ins and financial information, so they can receive discount vouchers or refunds for goods and services.

What to do

Never click on a link unless you can be sure it’s safe.

Take a look at the official social media accounts of your preferred retailers and suppliers – they often post warnings to customers about bogus offers.

If you find nothing online, contact the retailer to notify them of the scam.

5. Energy tariff refunds

Action Fraud has issued a warning about fake text messages purporting to be from energy regulator Ofgem, offering a £400 rebate on their energy bills.

The scam does have a basis in reality. In May, then Chancellor, Rishi Sunak, announced that households with an electricity supply would receive a £400 grant, scheduled to be paid in instalments and credited to their account. This scam asks people to click on a link to complete their application to receive the grant, including inputting their bank details.

What to do

Ofgem will never text or email anyone to sign up for rebates or refunds.

Consider that your energy supplier already has your payment details and will never send an unsolicited email or text requesting them.

Read the full underlying email address or number of the sender, and don’t be afraid to call your energy supplier, using the number on its website or your bill, to query suspicious correspondence.

Next week we’ll hear from one of NatWest’s Directors of Business Banking in the South West on what it’s like to be an SME right now and what support is available to SMEs.