Energy regulator steps up action against festive fraud

The issue of energy theft and scams, especially during the festive period, is a significant concern.

Ofgem, the regulator for the energy sector in the UK, has been urging energy suppliers to enhance their efforts in protecting customers from these fraudulent activities.

The various methods of energy theft and scams include illegal tapping into gas or electric supplies, tampering with metering equipment, selling fake prepayment meter top-up cards, offering fraudulent discounts on electricity, using fake electricity keys, and creating counterfeit websites or emails pretending to be Ofgem.

The financial impact of these crimes is substantial, with the estimated cost of energy theft in Great Britain ranging between £830 million to £1.388 billion per year.

This cost is indirectly borne by all consumers, as it adds approximately £29-48 annually to each domestic consumer’s energy bill.

The prevalence of these scams has risen with the cost-of-living crisis, providing criminals with more opportunities to exploit vulnerable customers.

Reports of energy theft to Crimestoppers have increased significantly, with over 12,000 reports in the 12 months leading up to April 2023.

Energy suppliers, under their licence conditions, are required to prevent and identify instances of energy theft. However, Ofgem’s findings indicate that suppliers have been falling short of their targets in this area.

For instance, in the years 2021/2022 and 2022/2023, the number of thefts identified and confirmed by suppliers was significantly below the set targets.

Melissa Giordano, Deputy Director at Ofgem, has emphasised the growing issue of energy theft and the need for suppliers to improve in preventing and identifying such cases.

She also advises customers to be wary of scams and reminds them of the risks associated with tampering with meters or energy supplies. For those struggling with bills, contacting their supplier for support is recommended.

Public awareness of energy theft remains low, with a survey by Crimestoppers revealing that 50% of the public know ‘nothing’ about it. The physical dangers of tampering with energy meters are also significant, including the risk of serious injury or even loss of life.

Ofgem is now intensifying its efforts to combat energy theft, engaging with various committees and boards to ensure that suppliers are taking reasonable steps to prevent, identify, and confirm instances of energy theft.

The regulator is also actively responding to scam phishing campaigns to protect consumers.

Finally, the regulator reminds everyone to be cautious and verify the authenticity of any communications related to energy, as criminals often try to create a sense of urgency to exploit customers.

This advice is particularly pertinent in light of the festive season, when the incidence of scams, including credit card fraud and ID theft, tends to increase.