As the cost of living crisis increasingly places more financial burden on families across the UK, more people are falling victims to elaborate scams which exploit their needs, according to HSBC and UK Finance.

HSBC reported a higher occurrence of customers being tricked into making investment plans after being contacted via phone call or text message.

UK Finance, the financial services association, previously warned that enterprises and customers should be mindful of an “epidemic of fraud” becoming a more present issue with fraudsters adopting varied fraud methods to evade capture and often prompt the consumer to “voluntarily” transfer their money to the offender.

In 2021, losses of £580mn were recorded in this type of scam known as authorised push payment fraud and total fraud losses in the UK rose to £1.3bn compared with £1.2bn in 2020.

Investment fraud, which usually targets the victim through a mixture of cold calls, ingenuine online ads, websites and social media outreach, last year cost the average person £14,000.

The false investment is usually displayed in an app or website that the offender creates however the consumer will lose contact with the offender.

Echoing this sentiment, Dame Clare Moriarty, Chief Executive of Citizens Advice, said: “We know scammers prey on our worries and fears and the cost of living crisis is no exception”.

The concerns of the financial sector are that criminals will exploit loan products and investment services that offer consumers extra support in difficult financial times, targeting organisations that have more lenient criteria. In addition, the use of emotional tactics will give customers the false assurance that their best interests are being met.

140,000 calls were made to the UK Finance fraud helpline since it was launched in September by industry partner, Stop Scams UK.

Lloyds urges customers not to disregard or ignore their bank payment warnings as a valuable measure to prevent the wrong transactions.

“We urge all payment providers to introduce Confirmation of Payee as quickly as possible. We can see it deters criminals now, and if more people take notice of the warnings, it can help stop fraudsters in their tracks” said Liz Ziegler, Fraud Prevention Director at Lloyds Bank.

The crisis of rising inflation to 9.1%, which is expected to rise even higher to 11% later in the year, also puts crippled families at more risk of answering scam emails referring to the UK’s ‘big six’ energy firms.

The significant gap between living costs and the average person’s income has forced the government to take take urgent action to introduce a price cap which will prevent energy companies from charging more than £3,200 by October.