Utilities Phone Scams: 10 Easy Tips to Protect Yourself From Utility Scams This Winter
Every year as the cold weather approaches, reports of utility scams increase. This year will be particularly challenging for people who are struggling to pay their bills due to the COVID-19 pandemic. The Coronavirus pandemic has caused heightened anxiety for many, and scammers are taking advantage of those that may be looking for a way to save money. They also scare people into having their utilities shut off if they don't pay immediately.
How the Utility Phone Scam Works
Scammers claiming to be representatives working at your energy service provider will call and threaten to cut your electricity off if you don't pay up. If you live in an area that's susceptible to winter storms, you know firsthand how terrible it can be to be without electricity and heat in the middle of the winter. This phone scam causes many people to react quickly and follow the demands of the scammer.
Using caller ID spoofing software, scammers change the number that displays on your caller ID to display the name and phone number of your energy company. The spoofed number makes the scammers hard to spot and very believable.
Fake Federal Scams
One of the more popular utility scams involves telling people about federal programs designed to help pay utility bills. The scammers use a variety of methods to get a foot in the door – from social media posts to phone calls, text messages, door-to-door visits, or posting fliers in low-income neighborhoods.
The scam begins by the con artists giving out fake information about a "special federal program" that can help pay their utility bills. The goal is to collect personal information, including Social Security numbers, birth dates, and bank account or credit card information. If meeting in person, the scammer may ask to see a current natural gas or electric utility bill. At the end of the meeting, the fake representative will instruct the target to send all future utility bill payments to a separate address – not the utility company.
The victim will quickly learn that there is no “special federal program” designed to pay utility bills. There are state programs that may apply. For example, The Low Income Home Energy Assistance Program (LIHEAP) receives federal funding, but it's operated at the state level. Some states have separate funds for energy assistance, such as The California Public Utilities Commission’s California Alternate Rates for Energy (CARE) and New Jersey's Universal Service Fund (USF). Additionally, many utility companies offer payment assistance programs and extensions to help customers who need help paying their bills. You can contact your local utility company for information on payment assistance programs.
"Restoring Your Power" Scam
Another recent ploy involves scammers contacting people who've lost their power through disconnection or a power outage. Fake utility workers go door-to-door, telling the homeowners that they can restore their power faster for a one-time fee. Of course, this is a scam. Utility companies don't go door-to-door except in case of an extreme emergency. The con artists will take the money and disappear. Then the homeowner must wait until the real electric company restores their power, along with everyone else without power during the outage. This con has been used for targeting residences as well as small businesses.
10 Steps to Take to Avoid Fraud
There are ways that these utilities scams can be easily avoided, below we go over 10 easy tips that if you follow will help you avoid and identify utilities scams.
Tip #1: Be skeptical.
If you receive a suspicious call from someone claiming to be from your energy company's billing department, be skeptical. Energy companies will sometimes call, but they will never ask for immediate payment by credit or prepaid debit card.
Never give personal financial information such as your credit card or bank account info. Sometimes phone scammers will have personal information about you, such as your full name and home address. Even if they have this information, you should not trust them.
Instead of giving your information, ask the caller for his information, including the representative’s name, company name, and customer service number, and then hang up.
Tip #2: Don't give in to fear.
If the caller badgers you into paying for a past due bill or to making a payment to avoid disconnection, don’t give in to fear. Thank the caller for the information and then say that you’ll contact the utility company directly, using the phone number printed on your bill or located on the company's website. No matter how much the caller insists, refuse to give in and hang up. Keep in mind that utility companies don’t demand banking information over the phone or by email. Also, paying over the phone is never the only option.
Tip #3: Learn to spot imposters.
Scammers often imitate someone you’d likely trust, such as a government official, family member, charity, or a company you’ve done business with previously. The person may be an imposter, so ignore expected requests by phone, email, or text.
Tip #4: Use your research skills.
Use Google or another search engine to investigate companies before you agree to anything. Type the company or product name along with words like “scam,” “review," or "complaint." You can also search for a phrase, like "IRS phone call,” or go to the Better Business Bureau. You can even search for phone numbers to see possible complaints or scam alerts.
Tip #5: Don't trust your caller ID.
Scammers know how to alter caller ID information to make it appear as if they are calling from another number. If you have any suspicions about a call, hang up and call back on a number you know is real. Never use the callback number supplied by the caller.
Tip #6: Be cautious of how you pay.
Credit cards and bank accounts often offer fraud protection, but many payment methods do not. Scammers will request payment through untraceable means, such as wire transfer services like Western Union or MoneyGram. The same is true for reloadable prepaid cards, like MoneyPak, and gift cards like iTunes or Google Play. Government offices and honest companies won't require you to use these payment methods.
Another method used by con artists is to send a check, have you deposit it, and wire money back. The law requires banks to make funds from deposited checks available to the account holder within days, but detecting a fake check can take weeks. If the deposited check turns out to be counterfeit or fraudulent, you're stuck with repaying the bank.
Tip #7: Get a second opinion.
Before you part with your money or personal information, get a second opinion from someone you trust. Con artists pressure people into making fast decisions but don’t give in to the pressure. They might even threaten you. Check out the story, do an online search, and consult a friend, family member, or an expert - sometimes all you need is a second opinion to confirm that something isn’t right.
Tip #8: Hang up on robocalls.
Hang up on any call that begins with a recorded sales pitch. These calls are illegal, and the products they try to sell are usually bogus. Don't press 1 to speak to a person or to “opt-out.” That only leads to more calls.
Tip #9: Don't automatically trust "free trial" offers.
While free trials don’t usually apply to utility companies like the electric company or natural gas provider, some scams involve related products and services. Some scams offer free energy home inspections or products to reduce your natural gas or energy bills. They will offer to send someone to your house to try out the service, which can include home warranty protection, energy-saving equipment, or an upgrade on your furnace or other appliance. Once the person is inside the house, you could be pressured for information or to sign up for a service you don’t want. There is also the possibility of being robbed.
Additionally, the free trial services often come with a monthly fee that is difficult, if not impossible, to cancel.
Tip #10: Sign up for free scam alerts and stay informed.
Visit the Federal Trade Commission website to sign up for free scam alerts and get the latest tips and advice about scams sent right to your inbox. The CallerSmart blog and Smart Guides also offer many resources to help keep you safe.
What to Do After You Get a Scam Call
Once you've gotten information from the caller and hung up, you should verify the information. Most energy companies have a 1-800 number or customer service number that you can call to check whether they are contacting people in your area.
You can also look up the number that the caller used with a reverse phone lookup for reported scammer activity. If you can't find any reported scam activity, it's still best to check directly with your energy company.
Reporting the Scam
After checking with your energy company and you find out that it was a scammer that called you, you should report it. Report all scams to your energy provider, your state's Attorney General's office, and the Federal Trade Commission.
Let Others Know About the Scam
Don't just report this scam to authorities, make sure you let friends and family know about it, too! The more people who know about utilities scams, the less success these criminals will have conning people from their money. You can help warn others by downloading CallerSmart's free reverse phone book app for iPhone by leaving your feedback on numbers you suspect are involved in scams. If you don't have an iPhone you can still use our reverse phone number lookup service here on our website and leave your feedback.