Don't Get Zapped by Utility Scams

Don't Get Zapped by Utility Scams: Keep Your Lights On and Your Wallet Safe

Imagine, for a moment, your phone rings, and the caller ID displays your local utility company’s name. You answer, and a voice tells you, “Your bill is overdue. We’ll cut off your power unless you pay—right now!” While your first response might be to panic, take a deep breath. This is a classic utility scam, and it’s more common than you might think. 

What the Utility Scam Looks Like

Utility scams come in a variety of shapes and sizes. Take a look at this story:

Sarah’s town was just hit by a major snowstorm, and the power has been out for a couple of days. A man shows up at her door wearing a uniform with the local electric company’s name on it and tells her he can get her power up and running right away—for a small fee.

Anxious to have her electricity back, Sarah gets out her wallet and hands over the cash. As she waits, wrapped up in a blanket and anxious for the lights and heat to come back on, the realization slowly sinks in. Not only is the man gone, but so is her money.

What do this example and the phone call above have in common? They’re both utility scams, designed to trick the unwary consumer out of their money or personal information.

The Dark Side: How Utility Scammers Operate

Deceptive tactics are a scammer's bread and butter. Here's a look at how some of the most common utility scams work.

The "Immediate Shutoff" Threat

This is one of the most common scams and can occur over the phone or even by someone at your front door. It’s a high-pressure conversation demanding immediate payment, usually through unusual methods like gift cards or money transfers, to avoid having your utilities disconnected. This is especially common in the winter months, as scammers know the threat of no heat makes their tactics even more convincing.

The "Refund" Ruse

 A scammer might call or email, then claim you've overpaid your utilities. If you’ll just provide your financial information, they’ll process that refund right away—or so they’ll say.

The "Fake Service Worker"

Someone might appear at your door impersonating a utility company representative, demanding immediate payment for repairs or upgrades. They might even ask to see a copy of your most recent utility bill to “check for problems,” and thus gain access to your account number and other personal information.  

As in the story above, if there’s been a widespread power outage, for example, after a storm, scammers might come to your door and claim to be able to restore your power for a fee.

The "Phishing Email" or "Smishing Text"

These messages may appear to be from your utility company and urge you to click on a link or call them with personal information to "resolve an issue" with your account. Scammers use these messages to try to trick you into sharing your personal information like account details or your financial information. 

Clicking links also opens your phone or computer up to potential malware and other viruses, so don’t open them. It's best to never interact with these types of messages at all. Instead, go check out the information in your service's online account center or call the customer service number that is listed on your account statements.

Shining a Light on Red Flags: How to Spot a Utility Scam

When it comes to protecting yourself from scams, the forewarned is forearmed. There are key warning signs to watch out for, some specific to utility scams, and others that apply to scams of all kinds:

• Threats of immediate shutoff: Legitimate utility companies will always provide ample notice before they disconnect your service due to non-payment. This is usually in the form of a letter through the postal service.
• Unusual payment methods: If any company or service asks to be paid via gift card, money transfer, or cash at your front door, that’s a huge red flag. Utility companies typically accept payments through established channels like online payment portals, mail-in checks, or phone payments using a credit card.
• Unsolicited contact: Utility companies rarely contact customers about account issues unless you've initiated contact. In the rare cases this occurs, you can tell if it’s a scam by listening to their message. The real utility company won’t mind if you want to hang up and call them back at an official number.
• Sense of urgency: If someone is pressuring you for immediate action and/or threatening you if you don’t act, it's a major red flag.

Power Up Your Defense: Practical Tips to Avoid Utility Scams

Now that you know the warning signs, here are some actionable tips to keep your finances safe and the power on.

Never Give Out Personal Information Over the Phone 

If you receive a call from someone claiming to be with the utilities company, hang up and contact your utilities provider directly using the phone number listed on your bill or their website.

Verify Caller ID 

Don't trust caller ID alone. Scammers can easily spoof legitimate phone numbers. Legitimate companies won’t mind if you tell them you’ll call them back. Scammers are the ones who will say, “Don’t hang up!”

Don't Click on Suspicious Links 

Phishing emails and texts often contain malicious links. Don't click on them! It’s always a wise practice to go directly to the website and log in from there, whether it’s your utilities or any other online account.

Report Suspicious Activity

If you suspect someone is trying to scam you, report it to your utility company immediately. You should also report it to the Federal Trade Commission at https://reportfraud.ftc.gov/. The more information the FTC has, the more they’re able to do to stop scammers.

Stay Empowered, Stay Secure

By understanding how utility scams work and following these simple tips, you can keep the lights on in your home and your finances safe.

Remember:

• Utility companies won't threaten immediate shutoff without prior notice.
• Legitimate companies don’t ask for questionable payment methods like wires, gift cards, or cash at your door.
• Be wary of unsolicited contact and pressure to “act now!”

When it comes to scams, knowledge is your best defense. Share this article with your friends and family to raise awareness and help them avoid falling victim to utility scams.

Additional Resources:

If you or someone you know has fallen victim to a scam, you should report it to your utilities company and your bank as soon as possible. You can also follow up with some of these additional resources:

• Federal Trade Commission (FTC): The FTC is the government agency that tracks and investigates consumer fraud. You can report the scam online at https://reportfraud.ftc.gov/ or by calling 1-877-FTC-HELP (1-877-382-4357).
• Your State Attorney General's Office: Many state Attorneys General have consumer protection divisions that handle utility scams. You can find the contact information for your state Attorney General's Office online.
• Credit Reporting Agencies: If you believe your personal information has been compromised as a result of a scam, it’s a good idea to place a fraud alert or freeze on your credit reports. This will help prevent identity thieves from opening new accounts in your name. Contact the three major credit reporting agencies (Experian, Equifax, and TransUnion) to request a fraud alert or freeze.