An investigation by consumer group Which? has revealed how cold callers are swindling vulnerable people out of thousands of pounds using direct debit scams.
A survey of 1,300 members found that a quarter had received unexpected calls about home appliance insurance and extended warranties within the last year which turned out to be bogus. Pressure selling tactics are used to convince individuals — typically elderly people — to agree to a direct debit of £10 to £20 per month, which criminals hope will not be noticed.
One 92-year old grandmother paid out over £10,000 over a two-year period to multiple firms claiming to be providing breakdown cover for her washing machine and boiler, as well as a dishwasher she did not even own.
If a direct debit has been set up without your permission or you have been duped, you are entitled to reclaim all of the money from your bank.
However, banks have been lobbying for other sectors — such as telecoms companies and internet service providers — to share the rising costs of reimbursing customers.
As a result of the investigation, trading standards officers are working with the Information Commissioner’s Office (ICO) to tackle companies making sales calls without permission to use the data. But the ICO only has the power to fine companies for breaches, rather than prosecute them.