Utility companies, state officials team up to protect consumers from utility scams
Scammers are increasingly using the hot summer months during the COVID-19 pandemic to take advantage of unsuspecting utility customers by demanding immediate payment in return for not disconnecting power, and utility companies are joining with state attorneys general and other officials to fight back.
Despite what many might think, no one is invulnerable to scams, according to Monica Martinez, executive director of Utilities United Against Scams (UUAS), and while more scams targeting utility consumers are being halted every year, the sophistication of fraudsters is growing, too.
At UUAS, a consortium of 146 U.S. and Canadian electric, water, and natural gas utilities that works with regulators, law enforcement, and telecommunications partners to halt scams, more than 10,000 toll-free numbers used in such scams were deactivated as of February.
Martinez stressed that utility companies will never send a single notification to a customer and demand payment by a prepaid gift card within one hour or have their service shut off. With phone and text messages though, scammers can make payment seem imperative, and some will pretend to be utility company employees or officials to complete the act.
“We know these scammers are adapting and using social engineering or other methods to really try to get someone to believe they’re the real deal,” Martinez said in an interview. “That is of course problematic. One of the things we do with UUAS is let people know scams are happening and that they can happen to anyone. We want to at least give people pause if they receive a call, a text, and ask: is this the real deal?” Consumers should stop and call the utility company back on the contact number found on their utility bill before making any payments, she said.
In Arizona, the prevalence of utility gift card scams prompted a warning from the state’s attorney general last week and a pledge to work with utilities to combat the scams. The state has united with the Arizona Food Marketing Alliance (AFMA), Salt River Project (SRP), Southwest Gas, Arizona Public Service (APS), Tucson Electric Power (TEP) and UniSource Energy Services to display warning signs at gift card racks around approximately 1,200 grocery and convenience stores statewide.
“Scammers will use the scorching summer months as a scare tactic to demand money from consumers,” Arizona Attorney General Mark Brnovich said. “If someone calls demanding payment with a gift card, hang up immediately.”
Time and again, however, the problem repeats. The same week Brnovich announced his office’s new partnership in Arizona, Kansas Attorney General Derek Schmidt was sounding an alarm about the increasing frequency of scam calls, punctuated by demands of immediate payment and threats to shut off victims’ power.
“Utility companies across the state have reported an increase in customer calls to their offices letting them know that imposters are out in force,” Schmidt said in a written statement. “Scammers are calling residents threatening to shut off services, often within days or mere hours, if they do not receive payment. The scammer insists that they must receive payment and have access to your financial information to keep the lights on, or more importantly, the air conditioner running. In some cases, the scammer insists that a check has bounced and asks that the customer purchase a prepaid credit card to make a payment.”
Similar scams were seen recently in Georgia and Illinois. Ameren Illinois noted an increasing number of scams in Illinois’ Coles County. There, the company warned, criminals are using new tactics making it more difficult to sniff out the scam, including the use of cash apps. Some criminals also pretend to tack on equipment or repair fees, or ask for bank information to give a customer a supposed refund for overpayment.
“Scammers have become more sophisticated by masking phone numbers to appear that the call is from Ameren Illinois or by calling residential or business customers during busy times of the day in an effort to confuse their victims,” Shirley Stennis, director of Customer Service for Ameren Illinois, said. “Our customers can protect themselves by recognizing the scam schemes and reporting them to the appropriate authorities.”
Likewise, Georgia Power stressed that its employees will never initiate calls to ask for sensitive personal information or credit card numbers to set up automatic payments or pay for new meters and other equipment. And Georgia Power will only handle past due notifications through a pre-recorded message or by letter.
“The company also does not send employees into the field to collect payment in person or ask a customer to pay with currencies like Bitcoin or to pay anywhere other than an Authorized Payment Location,” Georgia Power said.
Prior to the pandemic, there was a mix of business and residential customers being targeted with scams. Small businesses, Martinez noted, tend to have higher utility bills than residential customers, so they’re an easy target, particularly if they’re being harassed during the busy rush hour.
Now, amid business closures and uncertainties fueled by lockdowns and the spread of COVID-19, residential crimes have picked up.
“In talking with the Federal Trade Commission (FTC), they’re seeing a huge uptick in the number of scams,” Martinez said. “Scammers see opportunity with individuals being home, billions of dollars in aid going to individuals, so a lot of scams are happening – other scams unrelated to utility scams going on – and there’s an influx of scams happening generally. They’re taking every opportunity, and more and more customers are mired with a million other things that they’re thinking about. Maybe someone didn’t check the mail, or missed a phone call, maybe they might think it’s plausible.”
The best way to combat utility scams is through near-constant vigilance and communication, because new forms of scams crop up all the time.
“When people hear about utility bill assistance, there’s a scammer trying to figure out a way to capitalize on it. We need to be all hands on deck and on guard,” Martinez said. “Don’t be the one thinking it can’t happen to you. It can apply to a loved one, or someone you know, and the more you are willing to talk about the potential of being scammed, or the likelihood you have been scammed, the more you can reduce the stigma of it.”
