Common Utility Scams: How to Keep Yourself Safe
Scammers’ goal is to part you from your money. Targeting something everyone pays for, like household utilities, can be very lucrative for them. But there are ways to protect yourself from utility scams.
See Utility Scams with Amy Livingston for a complete transcript of the Easy Prey podcast episode.
Amy Livingston left publishing in 2004 and has been a freelance writer ever since. She now does a lot of writing about consumer issues for Money Crashers. She started writing about scams because it was one of many things she could write about, but soon she started getting satisfaction out of helping people beat the scammers targeting them.
I was going to help give people the tools they need to see [scammers] coming and be able to avoid them.Amy Livingston
Common Utility Scams
Most utility scams Amy sees involve people pretending to be something they’re not. We’re all used to people being who they say they are. If someone shows up at your door saying they’re from your power company and there’s a problem, you’re inclined to believe them. Unfortunately, a lot of scammers bank on this.
People have this impulse that if somebody says they’re official, they’re in a position of authority, you want to comply.Amy Livingston
We hear so much about scams over the phone and over email that we tend to be more skeptical. If someone shows up, we think it’s important. It’s also harder to take the time to make sure it’s legitimate if you have a person in front of you saying you need to deal with it right now.
These are some of the utility scams Amy sees often and how they work.
Power Company “Slamming” Scams
Amy once had people come to her door and say they were from the power company. They wanted to see her most recent bill so they could check that she wasn’t being double-billed. Luckily, Amy had just written about utility scams, so she knew what they wanted. They wanted to find the code that they can use to switch her over to a different power provider. She shut the door on them.
This technique – switching utility providers without your consent – is called “slamming.” Since deregulation, it’s possible to have one company delivering the power but be buying it from a different company. Amy has switched providers voluntarily because she prefers to support companies that use renewable energy, but these scammers want to switch you without you knowing. If they succeed, your bill will look the same – there will just be a note at the bottom saying you’re now purchasing power from a different company. You may not even notice you’re paying a higher rate, but you are.
It’s a scam, a particularly insidious type of scam because you may never even know it’s happened.Amy Livingston
Power Outage Scams
When your power goes out, scammers see an opportunity. They come knocking at your door and say they’re from the power company. If you just sign this and pay their commission up front, they can get your power restored faster.
This is always a scam. Your house is on the same power line as everyone else on your block – there is no physical way for them to restore your power before your neighbors’. The power company will restore your power as soon as they can for no additional fees. That commission you pay will go straight to the scammers’ pockets. They’re hoping you’ll be too focused on getting your power back to realize it’s a utility scam.
Home Security Scams
These utility scams can be done over email or phone call, but sometimes have scammers posing as people they’re not. They will show up at your door and say they’re from your security company there to do some upgrades. You let them in, and they switch out your equipment. Then they ask you to sign for the receipt of the new equipment. But what you’re actually signing is a switch to a new security provider.
You’re paying for a contract with the new security company, but you haven’t canceled with your old provider. If you try to cancel with your old provider, they’ll want their equipment back – but you can’t return it because the scammers took it. Now you’re stuck paying two contracts, only one of which is actually in your home, on top of fees for the equipment the scammers stole from you. And it’s quite possible your new one is inferior to your old one.
Some scammers may pretend to be your security company and ask for your security codes so they can upgrade your equipment. This is always a scam – the security company has their own codes and will never need yours.
A security system doesn’t do a good job of protecting you from the person you let in because they said they were from the security company.Amy Livingston
Unpaid Utility Bill Scams
These utility scams take advantage of a sense of urgency and create fear. Unlike the other scams in this list, it’s very rare someone comes to the door for these. Most often, they’re done over phone call. Someone will call and say they’re from the utility company and you haven’t paid your bill, and if you don’t pay immediately they’re shutting off your service.
These scammers don’t encourage you to pay the bills through the normal channels. If you did, the money would go to your real utility company and not to them. Instead, they will insist that you give them your credit card number over the phone, and if you don’t they’re turning off your service in half an hour. Nobody wants their power turned off. In the face of a threat like that, a lot of people don’t ask the scammer to confirm they’re actually from the utility company or check their online account to see if they actually owe money. A lot of people panic and pay the scammer.
Federal Aid Program Scams
Federal Aid Programs are government programs to help people who are having trouble paying their utility bills. In this utility scam, the scammer will come to your door claiming to work with a federal aid program and saying they can help you enroll. They’ll promise that if you give them your information, they will set up a new account and you can pay into that account instead of paying your utility bills.
This utility scam hurts you in two ways. You’re paying into this other account, and that money is going straight to the scammers. And since you’re not paying your utility bills, you run a real risk of having them actually shut off.
There are a lot of federal aid programs out there, but they already have plenty of people needing aid. If you need one of these programs, you have to go looking for them. They won’t send people knocking on doors to enroll you.
How to Avoid Utility Scams
Don’t Trust Caller ID
It’s very easy for a scammer to spoof caller ID. If you get a call claiming to be from a utility company, don’t trust the caller ID. The best way to verify is to hang up the call, look up your utility provider’s number somewhere else, and call them directly. Don’t call the number that called you or the number the caller gave you to call back.
Scammers want to keep you on the line and will do everything possible to keep you from verifying if they’re really with the utility company. If you tell them you want to hang up and call back, they will protest. They’ll say you don’t have to go through the trouble and they can help you right now – anything to keep you on the phone. A representative of the real company will have to problem with you hanging up and calling back. They value security.
Verify the Person is Legitimate
Someone at your door claiming to be from your utility company may or may not be genuine. If they’re trying to run a “slamming” scam on you, they might say they’re from “the power company.” It’s technically true because they don’t specify which power company. Verify that they’re legitimate before giving them any information, money, signatures, or access to your home.
Get them to give you the name of the company. If they’re evasive, you can do yes-or-no questions: Are you with PSE&G power company? Once you get a company name out of them, ask to see ID. It needs to be more than a clipboard with letterhead. Someone actually from PSE&G power company will have a company ID – and they probably would have said they were with PSE&G right away.
If you’re still not confident they are who they say they are, ask them to wait outside while you call the utility company to make sure they really sent someone. At this point, if the people at your door are running a utility scam, they will probably leave rather than be found out.
Amy has been tempted to follow them to the next house and warn the next people not to trust them, but she hasn’t gone that far yet. She has heard of cases where these scammers pushed their way inside and physically threatened people. This is rare, though. In most cases, all utility scammers want is your signature or information so they can get your money.
When they ask you for information, anything they could use to get at your money, that’s the point where you say, let me double-check this. If they are legit, they won’t object.Amy Livingston
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