Cost of living: Millions warned to 'beware scammers' as new payment scheme rolls out

Man using a credit card to pay bills
Millions of Britons are being urged to be wary of scams. (Getty Images)

Millions of people in the UK have been warned to look out for scams as the dates for the latest cost of living payments were announced.

More than eight million households will receive a £301 payment from the Department for Work and Pensions (DWP) this spring, the government announced on Monday.

It is the first of three payments, which will total up to £900, for those eligible and on means-tested benefits such as universal credit or pension credit.

Read more: Cost of living payment - how to find out if you're eligible

The first payment will be made between 25 April and 17 May.

It follows the £650 cost of living payment made to more than eight million people last year.

There will also be further payments worth £150 for eligible people with disabilities and £300 for pensioners due later this year, meaning some people will receive up to £1,350.

But Britons are being warned to be wary of scammers exploiting the cost of living payment to fleece people out of their money.

Cost of living scams

Last summer, Citizens Advice said more than 40 million people had been targeted by scammers as the cost of living crisis gripped the UK. Three quarters of adults were targeted, a 14% increase on the previous year.

Watch: Chancellor fixes energy price guarantee at £2,500 for three months

Citizens Advice said the most common scams were deliveries, postal or courier services (55%), someone pretending to be from the government or HMRC (41%), a scammer offering a fake investment or "get rich quick" scheme (29%), followed by rebates and refunds, banking scams, online shopping, health or medical scams and energy scams.

In January, the DWP used a social media campaign to warn people eligible for cost of living payments to watch out for scammers.

It told those who are eligible: "You do not need to apply for the payment. You do not need to call us. Payment to you is automatic. We will never ask for personal details by SMS or email.”

How do you check if it’s a scam?

Campaigners have warned that scammers may use cost of living payments as a fresh opportunity to try and trick people into handing over their banking details or money, by purporting to represent government organisations.

However, the £301 payment will be sent out automatically and directly to recipients – meaning those eligible do not need to apply or do anything to receive it.

The payment reference for bank accounts will be “DWP COLP”, along with the claimant’s national insurance number.

The latest warning

On Monday, consumer site Money Saving Expert - founded by broadcaster Martin Lewis - issued advice to people to look out for scams.

It said: "Payments will be automatic and you don't need to apply – beware scammers saying otherwise. If you qualify for these cost of living payments, you don't need to apply.

"You'll be paid automatically in the same way you usually get your benefits or tax credits. Watch out for texts or emails inviting you to claim or apply for the payment – they're scams."

LONDON, UNITED KINGDOM - MARCH 15: People from different sectors and unions, holding various banners and placards, gather to march from Hyde Park to Trafalgar Square to protest the high cost of living and insufficient salary increases, in London, United Kingdom on March 15, 2023. (Photo by Rasid Necati Aslim/Anadolu Agency via Getty Images)
People protesting against the high cost of living during strike action in London earlier this month. (Getty Images)

In its advice about the cost of living payment, the DWP says: "If you have had a message asking you to apply or contact someone about the payment, this might be a scam."

The department also said: "Do not give out private information (such as bank details or passwords), reply to text messages, download attachments or click on any links in emails if you’re not sure they’re genuine."

Cost of living: What payments are available and how do you claim?

Citizens Advice said people should be wary of being asked to transfer money quickly or in an unusual way, or if they have been asked to give out personal information such as passwords and PIN numbers.

It warned consumers not to click on or download anything they don't trust, for example, if something is sent to them from a strange email address.

What should you do if you have been scammed?

DWP advice says if you are in England or Wales and you think you have been a victim of an online scam or fraud you should contact Action Fraud, the UK's national reporting centre for fraud and cyber crime.

Those in Scotland who have lost money because of an online scam or fraud should report the crime to Police Scotland.

Watch: Bank of England boss says inflation 'far too high'