As the threat of climate change becomes more evident, consumers have become increasingly aware of their impact on the environment. Many are making changes to their lifestyle, switching to electric vehicles for instance, but others are looking to their property and improving the energy efficiency of their home.
Recent political events have prompted even more people to consider these changes, with rising gas and electricity prices caused by Russia’s invasion of Ukraine encouraging homeowners to find ways to reduce their energy bills.
This rising demand for and focus on improving energy efficiency has led to the growth of the green mortgage market, but this, unfortunately, has been accompanied by a surge in green scams too. These include fake deals on sustainable home improvements, such as heat pumps and solar panels, which are often sold to vulnerable or unsuspecting customers.
An industry wide push is needed to combat the rise of these scams, and as a key contact advising consumers, brokers have an integral role to play in keeping clients informed about the different tactics these fraudsters use and how to avoid them.
Green scams are on the rise
Action Fraud reported that there was a 50% rise in the number of green scams over the course of 2022, with the victims of these scams often falling into the over 60s demographic.
Criminals use a number of different methods to get in contact with their victims. This includes texting, emailing or even phoning clients while posing as a salesperson from a price comparison site. Other tactics used by fraudsters include referencing fake government grants or directives, with one scam seeing criminals invite their victims to apply for a £400 government energy grant as a way to steal sensitive personal information and financial details over text message. This was especially common during the winter amidst freezing temperatures and sky-high energy bills.
The use of publicly held information is also key in facilitating green scams aimed at those who have already made green home improvements. Scammers use publicly available data to offer free health checks for wind turbines or solar panels, sell unneeded voltage optimisers, and even claim that solar panels are potential fire risks or non-compliant with recent law changes.
Brokers’ role in the fight against green scams
As the first port of call for many mortgage customers, brokers are well placed to make clients aware of the potential risks of scams and guide them on how to avoid falling victim to fraudsters. There are several ways to avoid these scams, which could act as useful tips that brokers could share with their clients, including:
• Performing their own research – before buying into any green products, clients should check the legitimacy of offers through company websites, reviews, or references.
• Checking certified schemes – when looking for a trader to use, customers should check certified schemes that recommend traders such as the government-endorsed Trustmark scheme.
• Obtaining written quotes and a contract – homeowners should secure quotes from at least three different contractors to determine the fair market price. Once clarified, they should always receive contracts in writing before proceeding with any refurbishments.
• Staying alert – customers should be wary when companies offer to complete applications or paperwork for government grants which are potentially fake. It is also important for individuals to check independently for any available financial support through local government agencies.
• Using a secure payment method – credit cards offer the most protection, followed by PayPal or debit card. If possible, sometimes the best option is to pay in instalments to avoid paying large upfront costs where possible.
By making clients aware of some of the most common scams, the tactics scammers use and any potential warning signs, brokers can help clients make safe and informed decisions that protect their personal finances. Furthermore, having a trusted and knowledgeable advisor at their side can help give clients the confidence to make green home improvements to their property and create an energy efficient home.
Jonathan Stinton, head of intermediary relationships at Coventry for intermediaries
