In 2021, the Federal Trade Commission received 5.7 million consumer incident reports. About half of those were identified as fraud and a quarter as identity theft.
Those statistics don’t track utility fraud specifically, but the Better Business Bureau says it receives about 1,000 complaints of utility scams each year.
According to FTC, Americans lost more than 5.8 billion to fraud in 2021, which was more than a 70% increase from 2020.
Even in a time when information is readily available, it is still easy to fall prey to utility scams. This is especially true during times when people are most vulnerable, such as the holidays, after natural disasters, or during extreme hot or cold weather.
With the arrival of summer, be better protected by becoming familiar with common utility scams and how to handle them.
Imposter scams were the most common form of fraud in 2021, accounting for more than one-third of reports listed by the FTC.
When fraudsters impersonate utilities, typically people receive a random call from an unknown number. The caller says the last electric bill was not paid and, as a result, power will be cut off unless payment is made immediately by credit card over the phone.
Caller ID may show the call coming from the utility, and the exact amount of the member’s most recent bill may even be recited.
Ryan Davies, director of customer and energy services for Central Electric Cooperative based in Redmond, Oregon, says this kind of scam interaction is the most typical his members experience.
“The majority of scam calls received by our members are directed as high pressure and time-sensitive in nature—you must pay now or this will occur,” Ryan says. “CEC always encourages members to call our offices directly if there is ever a question of validity.”
Several practical steps can be taken to avoid these scammers. Do not be rushed or pressured to act. Utility companies send late payment and cutoff notices if the situation warrants, and there will be time to respond.
“Our customers are pretty savvy when it comes to avoiding scams, but even the savviest customer can fall prey to a scam—especially when they are threatened with having their electricity disconnected,” says Theresa Phillips, public relations manager at Lassen Municipal Utility District in Susanville, California. “The best way to spot a scam is to know as much about your utility account as possible. If customers are using our SmartHub app to keep track of usage and to stay on top of payments, they are well-armed against scammers who use fear tactics and misinformation.
Signing up for automatic payments—which ensures you’re never behind—means you won’t receive reminder notices or disconnect notices from LMUD. By doing these simple things, customers can literally take away the power that scammers want you to think they have.”
Don’t Share Your Credit Card Info
It is important to never send money or credit card information in these situations. Once scammers have either, there is little to be done in the way of loss recovery.
According to Utilities United Against Scams, the typical cost for scam victims was $500 per person in 2021.
“At Golden Valley Electric Association, scammers seem to be the norm these days, so we consistently remind members to be aware,” says Meadow P. Bailey, director of external affairs and public relations for the Fairbanks, Alaska, cooperative. “These calls all seem to have one thing in common: They threaten to disconnect power if payment is not made.
“Historically, members have lost money when they’ve complied with scammers’ requests. Once bank or credit card information is turned over to scammers, there is little we can do to assist with the recovery of those funds, except recommend that the member file a police report or dispute the transaction with their bank or credit card company.
“A good rule to follow, if you did not initiate the contact either by phone or email: Do not provide any personal information. This includes credit card, Social Security numbers or banking information.”
Emails and Text are Targets
Phone calls are not the only way scammers attempt to reach targets. Con artists keep up with technology through email and texting.
In a recent scam, people are told to pay by gift or cash card—something a utility company would never ask. Another new scheme tells consumers to pay their bill with cryptocurrency.
Your electric utility will not require you to pay by bitcoin or similar methods.
To avoid these scams, AARP strongly recommends never clicking on links attached to suspected spam emails or text messages.
If you fall prey to a scam, do not feel embarrassed. Instead, report the crime to law enforcement and your utility.
The state attorney general is responsible for going after fraud and will want to know about any suspicious schemes. In rare instances, it can help restore money to those who are scammed.
Maria Jones, director of member services and government relations at Florida Keys Electric Cooperative Association based in Tavernier, Florida, is a proponent of taking charge of scam situations as soon as they occur.
“Be proactive in stopping scams,” she says. “If you receive a suspicious call, email or visit threatening to disconnect your power, hang up and call your utility immediately to ensure you are speaking to a bona fide employee.”