Notorious Utility and Energy Scams: What to Look For and Protection Advice from Elder Protective Services

It’s a sweltering summer day and your air conditioner is blowing on full blast. You seem sure that you paid the last electric bill, but the utility representative waiting at your front door with an ID and iPad is claiming otherwise. He continues to argue that your bill is past due. The rep states that if you do not pay the bill and late fee immediately, the electric will be shut off. What a nightmare you think as you hand him your ID and credit card, exactly what the scam artist wants you and other underprotected elders to feel.

Impostor scams, such as utility company impostors, are the most frequent type of fraud reported to the Federal Trade Commision (FTC). Scam artists call homes to make fake appointments or show up at a victim’s door threatening to turn off one energy or the other. These scam artists rely on urgency and fear, targeting unsuspecting elders during peak seasons, like the winter holidays or summer breaks. According to several energy companies, utility scammers typically seek out seniors or non-native English speakers, but the truth is anyone who has a utility bill is vulnerable. Anyone, however, can prevent being a victim by learning about what to look for and how to protect against attacks. 

False Utility Representatives

Just like in the example above, utility company impostors will often appear at a victim’s door wearing a believable uniform with a popular utility’s company logo embroidered. Most scammers will have a seemingly credible ID and many also carry an iPad or other official-looking technology. Some have the end-goal of an immediate payment. The “utility representative” states that your service will be cut off if you do not pay immediately. The scammers create a sense of urgency to pressure the victim into making some type of payment. Others will trick victims into allowing them entry. These criminals will distract victims in order to find items to steal. A 2014 case reported by the New York Post describes a utility scam that resulted in over $70,000 of cash and items stolen.

What to Look For

• An unexpected call or unscheduled visit from someone claiming to be with your utility company
• Request to enter the home for a “free” audit or inspection
• Immediate payment to prevent service from being cut off
• Payments could be for an overdue bill, maintenance cost, diagnostic results, meter report, or even for a bill on a utility account you did not open
• Demands for payment by cash, wire transfer, cryptocurrency, or gift card
• Requests for your existing energy provider account number or even a copy of your entire utility bill

Protect Yourself

• If the call or visit is unexpected, call your utility company, using the number on the bill, to verify if you missed or need to make a payment
• DO NOT call a number from an unsolicited voicemail, email, or text message.
• Remember: Most utility companies do not stop service without advanced warning
• NEVER allow a utility employee to enter your home without an appointment
• DO NOT provide your personal or financial information to someone who calls, emails, or texts claiming to be with your utility company
• DO NOT send cash, wire money, or provide numbers from gift cards to someone who calls, emails, or texts claiming to be with your utility company
• NEVER click on links in an unexpected utility-related email or text message

Door-to-Door and Direct Sales

Another scam on the rise is the Fake Direct Energy Sales scam. In some states where energy providers compete for customers, they market their service door-to-door. A sales representative will come to a potential customer’s house with information about their and their competitor’s services and prices. These salespeople will ask if the potential customer is interested in switching power companies. This sales tactic is a perfect disguise for scammers. There are three potential Door-to-Door Sales that any utility bill payer could fall victim to:

Teaser Rates

In this scam, a salesperson claims that you qualify for a special rate, but only if you sign up right then. They create a sense of urgency and most victime sign without reading the terms of service agreement, which often state that this price is only an introductory rate that lasts for the first month or two. Beyond that, new customers will be charged a much higher rate.  

Required Switch

Some scammers will target elders who live in apartment complexes or trailer parks just to use the “it’s a required” switch tactic. In this scam, a sales representative will claim that the landlords or complex owners made the switch to a new company and everyone is required to consent to the switch. Best case scenario, the scammer gets a bonus for a new sale and the victim pays MORE for their energy. Worse case scenario, the scammer obtains personal or financial information to exploit the victim.

Slamming

In this scam, criminals switch victims to a new power provider without their consent. Typically, the scammer poses as a sales representative from a local utility company and demands to see the victim’s latest bill because of an issue on the account. Once the scammer has the bill, they copy the account number and switch the victim over to another provider.

Protect Yourself

• If a call or visit is unexpected, call your utility company, using the number on the bill, to verify if you missed or need to make a payment
• DO NOT call a number from an unsolicited voicemail, email, or text message.
• ALWAYS ask for ID
• Do not assume that a utility or sales representative in a uniform is official.
• NEVER give your utility bill to others.
• Your utility bill includes private financial and personal information that scammers will use to steal or exploit.
• When signing up or switching to a new energy provider ALWAYS read the contract.
• Read the fine print, looking for details about “introductory rates”, cancellation fees, and cost per kWh.

Overpayment

Overpayment scams are popular and dangerous. Scammers will call pretending to be a utility representative and claim that the victim has paid too much on their last energy bill. In order to provide a direct refund, criminals will ask for the victim’s bank account information or credit card number. Once a scammer has the victim’s personal and financial information, such as a Social Security Number, they will sell the information to other cybercriminals or use that information for identity theft.  

What to Look For

• An unexpected call from someone claiming to be with your utility company
• A request for personal or financial information for an IMMEDIATE refund
• Pressure to accept the refund
• Remember: If you overpay an energy bill, most utility companies would list the overpayment as a credit on your next bill and deduct the credit automatically in the next cycle.
  

Protect Yourself

• If the call is unexpected, call your utility company, using the number on the bill, to verify if you overpaid.
• If the call is unexpected, hang up. You have no obligation to speak to that person.
• If an unexpected call requires you to press a number for a refund, hang up.
• Even if you do not go through with the “refund”, the scam artist will likely sell off information, like your phone numbers, to other criminals.
• Report the scam.  
• Key Takeaways:

Utility scams prey on elderly victims by creating a sense of panic and urgency. Keep the look-fors and red flags of common scams in mind whenever answering unexpected phone calls or if you have an unscheduled house call. Whether you are chatting with an energy representative online or at your door remember:

• NEVER share your personal or financial information
• ALWAYS ask for verification or ID
• NEVER wire money or send cryptocurrency to unverified sources
• DO NOT allow a utility employee entry to your home without an appointment

Take time when making an important a decision 

Reporting Utility Scams

If you suspect someone is a scam artist, call your local utility provider and/or local police. It is imperative to report utility scams to the Federal Trade Commission at 1-877-832-4357 or www.ftccomplaintassistant.gov.

Daniel Klibanoff, an advocate for seniors, is currently serving as the President and CEO of Multimedia Lists, Inc. Daniel is also the founder and director of Elder Protective Services, an enterprise aimed to serve and protect elders. Learn more at Elder Protective Services.