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Cost of Living Crisis and Consequences Overview:
- Who: UK Consumers should brace themselves to be targeted by loan sharks and door-to-door energy sellers thanks to the energy and cost of living crisis, Trading Standards warns.
- Why: The crisis will make consumers financially desperate, and more vulnerable to scammers, fraudsters and loan sharks.
- Where: Across the United Kingdom.
UK residents should be prepared to see an increase in fraudsters, loan sharks and door-to-door energy sellers preying on financially desperate people thanks to the increased cost of living, experts are warning.
In a press release issued Feb. 22, the Chartered Trading Standards Institute (CTSI) said the cost of living crisis will greatly expand consumer vulnerability, and that the UK “urgently needs a more effective strategy to protect consumers.”
UK residents are suffering from economic challenges brought on by the COVID-19 pandemic, ongoing impacts brought about by the UK’s exit from the European Union, and from a global energy shortage hitting the nation particularly hard.
This month, Ofgem announced the energy Default Tariff Cap would rise by 54% or £693 from April 1, while the Bank of England reported that UK inflation rose to 5.5% in January – the highest rate since March 1992, CTSI said.
The organization said the situation creates “a perfect storm” for residents.
It said its experts are concerned that the cost of living crisis will lead to openings for fraudsters to take advantage of a financially desperate public, especially the most vulnerable.
Some of the likely consequences listed by consumer protection experts include an increase in loan shark activities and predatory energy tariff selling by doorstep sellers, alongside other “questionable money-saving schemes.”
“The cost of living crisis risks a significant rise in consumer detriment that the UK has not seen for decades,” CTSI Chief Executive John Herriman said.
“The COVID-19 pandemic warned us about the depths some will sink to through the scams that emerged out of it. For the unscrupulous, crises are opportunities to make a dishonest profit from the most vulnerable.”
Herriman said the government and other stakeholders needed to work together to protect consumers, putting in place a strategy that recognizes the upcoming risks.
Last year, a report from consumer group Which? found a “devastating surge” in scams had bilked consumers out of more than £2.3 billion since April 2020, an increase of 33 percent during pandemic months.
The report said that consumers in England, Wales, and North Ireland reported more than 413,000 cases of fraud to the UK’s national reporting centre for fraud and cybercrime, Action Fraud, between April 2020 and March 2021.
What will you be doing to protect yourself from those offering predatory financial assistance? Let us know in the comments.
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