Utility Bill Scams: How Can You Protect Yourself?
A call from your electric, gas, or water company threatening to turn off your service immediately is probably a scam. Here’s what you need to know: A utility bill scammer’s goal is to separate you from your money.
Targeting something everyone pays for, like household utilities, can be very lucrative for these types of people. But there ARE ways to protect yourself from utility scams. Crooks are relentless, and they will do anything to pull off a good heist.
That includes impersonating utility companies, a tactic the Federal Trade Commission has been warning us about since early in the Covid pandemic.
The scheme is designed to “dupe people out of their cash and personal information by convincing them that their utilities will be shut off if they don’t pay.”
Here’s how to spot utility bill scammers, including the most sophisticated ones, who are now calling from official-looking numbers. And we’ve come up with 8 ways of protecting yourself from becoming a victim.
…Keep reading to get the best tips!
Power Shut-Off Utility Bill Scams
It could take the form of an email or phone call, or someone might simply show up at your door, threatening to shut off your gas or electricity for nonpayment.
They will likely demand payment on the spot, often in the form of an untraceable method: prepaid debit card, wire transfer, or cryptocurrency. They could ask to see your most recent bill to check that you’re not being double-billed.
They ACTUALLY want to find the code that they can use to switch you over to a different power provider. 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. If they succeed, your bill will look the same. But there will 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 shady scam, because you may never even know it happened.
Federal Aid Program Utility Bill Scams
These are government programs to help people that have 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’ll 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.
First, you’re paying into this other account, and that money is going straight to the utility bill scammers. And second, 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 look for them. They won’t send people knocking on doors to enroll you.
Power Outage Scams
When your power goes out, utility bill scammers see a perfect opportunity to attack. They come knocking at your door and say they’re from the power company. If you sign something and pay their commission upfront, 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’s no physical way for them to restore your power before the rest of your neighbors. The power company will restore your power as soon as possible without any additional fees.
That commission you pay will go straight into the scammer’s pockets. They’re hoping that you’ll be too focused on getting your power back to realize it’s actually a utility scam.
Unpaid Utility Bill Scams
These utility bill scams take advantage of a sense of urgency and create fear. Unlike the other scams on this list, someone rarely comes to the door for these. Most often, they’re done over the phone.
Someone will call you and say that they’re from the utility company and you haven’t paid your bill. And if you don’t immediately pay, they’re shutting off your service. These utility bill scammers don’t encourage you to pay the bills through the usual channels.
If you did, the money would obviously go to your actual utility company and not them. Rather, they’ll insist you give them your credit card number over the phone, and if you don’t, again, they’re turning off your service in an hour.
Nobody wants their power turned off. So many people panic at that moment, and they pay the scammer.
…To help you stay better organized so you can regularly track what you owe, we recommend this nifty budget planner to help you out!
Home Security Scams
These utility bill scams can be done over email or phone calls. But often, someone will show up at your door and say they’re from your security company 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 really signing is a switch to a new security provider. You’re paying for a contract with a new security team, yet you haven’t canceled with your old provider.
If you try to cancel with your old provider, they’ll want their equipment back. Only you can’t return it because the scammers took it.
So 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 your new one may be worse than your old one.
Some utility bill scammers may even 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 its own codes and will NEVER need yours.
…So How CAN You Avoid Utility Bill Scams? Keep reading to find out!
Verify The Person Is Legit
If someone’s at your door claiming to be from your utility company, it 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 accurate 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 provide you with the name of the company.
If they’re evasive, you can do yes-or-no questions. Ask to see an ID. It needs to be more than a clipboard with a letterhead. Someone from a legitimate company will have a company ID.
If you still don’t trust them, ask them to wait outside while you call the company to make sure they really sent someone. At this point, if the people at your door are running a utility bill scam, they’ll probably leave.
Don’t Trust Caller ID
It’s very straightforward for a scammer to spoof caller ID. Don’t trust it if you get a call that claims to be from a utility company. The best way to verify is to hang up, look up your utility provider’s number somewhere else, and call them directly.
Don’t call the number that called you. Utility bill 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. They WILL say anything to keep you on the phone. A representative of the actual company will have no problem with you hanging up and calling back. They actually value security!
Always Report Utility Bill Scams
Did you know that 1 in 10 Americans will fall victim to a utility bill scam or fraud every year? Were YOU scammed? If you’ve gotten a call from or were reached by a fake utility company, you should:
- Report the scam to your utility company, either online or by calling a number you’re sure is real.
- Please report it to the FTC (Federal Trade Commission)
- You can also report it to your state’s attorney general.
And make sure you let other people know about this scam as well. This way, they can avoid it too!
…If you found this article on utility bill scams helpful, we would also recommend: Are Your Retirement Savings On Track? Here Are 8 Tips