How to Recognize and Avoid Utility Scams

How to Recognize and Avoid Utility Bill Scams

Fraudsters looking to trick people into giving up money usually find new ways to perpetuate scams, especially as the public starts to catch up to their tricks. One increasingly popular ripoff method is a utility bill scam. Although this seems very easily detectable, its frequency once prompted the Federal Trade Commission to issue a Consumer Alert to warn and protect the general public. To properly recognize and avoid utility bill scams, it is vital to first understand them and how they work.

What Is a Utility Bill Scam?

A utility bill scam involves a fraudster who pretends to be a representative of a public utility company and uses this ruse to collect payment from a victim. In most cases, the scammer would threaten that you will lose access to power or other utilities if you do not pay immediately. Utility bill scammers use fear as a potent tool and are likely to insist that you will be cut off even if you have proof that your next payment is not due.

Types of Utility Bill Scams

There are many different methods fraudsters may use to swindle you. The following are some of the most common:

• Green Dot Scam: Here, the scammer pretends to work with or represent a utility company and may visit or call to inform you of supposed outstanding bills. The imposters usually communicate in a way that makes customers panic and may add that the power or gas service will be discontinued if you don’t immediately pay. Many people fall for this trick and quickly pay the scammers before being any wiser.
• Home Inspection Scam: Fraudsters may visit you pretending to be from an energy company or related business and may offer some freebie like a free home inspection or energy audit. They enter, conduct a fake inspection, and then provide you with some solution to a fake problem or some way to improve energy usage. These scammers are usually in a hurry for you to take up their offer and may add that the freebie is a one-time opportunity. In some cases, one scammer distracts you with an explanation of this freebie while the other steals items from your home.
• Power Outage Scam: Sometimes, scammers wait for power outages and target affected homes. The scammers go door to door, introduce themselves as official representatives of a utility company, and claim that they will restore power for a fee.
• Utility Company Switch Scam: This scam involves someone offering you reduced electricity bills if you switch to a different provider. The reduction offer is sometimes so attractive that some people quickly sign on. The scammer then requests personal information, including an account number and a previous power bill. Afterward, fraudsters may find a way to move you to another provider where you might end up with higher bills, or simply steal your identity for other illicit purposes.

How to Recognize a Utility Bill Scam

Scammers use varying tactics to trick people into submitting important information or paying fake reconnection or repair fees. Although their methods constantly change, the following are a few things that may point to a utility bill scam.

• A Sense of Urgency: Utility bill scammers are usually in a hurry. They want you to quickly pay for a reconnection, new product, or overdue bills, without due diligence. These scammers know that if they can get you to panic, there is a good chance you would be willing to solve whatever problem they present to you as quickly as possible.
• Unusual Payment Options: Legitimate payments to utility companies are usually via credit or debit cards, mailed checks, or other options that leave an identifiable paper trail. Scammers looking to take money from potential victims don’t want to be traced. These fraudsters usually prefer methods such as gift cards, prepaid cards, or cryptocurrencies like Bitcoin or Ether. In other cases, scammers may not worry about leaving a paper trail but would use an unconventional method like Zelle.
• Fuzzy Account Details: Utility bill scammers typically have very little details about your account. The information is usually vague and may be something that applies to more than one account. A legitimate representative of your utility bill company would have more than enough specifics about your account and use these details to support the real reason they are reaching out to you.
• Unusual Request for Sensitive Information: Scammers looking to steal your identity will likely ask you for sensitive information and pass it off as a harmless routine request. There is absolutely no reason you should provide a utility company’s representative with private information like a Social Security Number. If you’re asked for personal identification information, you’re likely dealing with a scammer.
• Unscheduled Visits: Legitimate visits from utility companies are rarely unscheduled. The company would usually call ahead to confirm an appropriate time and even explain the reason for the visit. There’s a good chance you’re dealing with a scammer if the person simply knocked on your door without any notice.

How to Avoid a Utility Bill Scam

• Know the basics of your bill and arrangement. If you’re sure your payment is not yet due, it would be easy to conclude that the person at your door or on the phone is a scammer. It’s important to understand your bill and power arrangement and also monitor other specifics like payments and power usage.
• If anyone claims to be from your utility company, you must verify before providing them with information, no matter how seemingly insignificant. Instead of asking them any further questions, you can double-check by calling the number on your power bill.
• Most utility companies would not cut off your service without notice. This means that anyone threatening you to pay or risk losing access to a service is very likely a scammer.
• Don’t send money to any representative who does not provide you with an official account tied to the actual utility bill. If you are unsure, call the number on your utility bill to confirm. Do not send money via Zelle, CashApp, crypto, or any other third-party payment method without confirmation from the utility company.
• Do not let anyone into your home if you are unaware of a scheduled visit from the utility company. If there is a need for a home inspection, the utility company will reach out to you to properly schedule one.
• Don’t do anything in a hurry. While scammers will try to get you to quickly make a payment or let them into your home, a real utility company is unlikely to rush. If anything feels a little too hasty, double-check by reaching out to the utility company. In most cases, there is hardly any real emergency that would cost you your service if you had no idea before the visit or phone call.
• Stop the communication and verify if you’re ever in doubt about a phone call, visit, or email.

If you were contacted by a scammer, immediately report the call, email, or visit to your utility company, the Federal Trade Commission, and your state’s Attorney General’s Office.