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6 Home Utility Company Scams to Beware Of (Water, Electric & Gas)

A few years ago, a couple of young people came to my door dressed in a uniform I couldn’t identify. They said they were from “the power company” and they were there because they’d been “getting calls from all [my] neighbors about why their bills are so high.” They then asked to look at my utility bill so they could see if it had a particular code at the top. If it did, that would mean I was being “double-charged” on every single bill.

It sounded pretty serious. It sounded like something that any customer who cared about lowering their utility bills would want to fix right away – which is probably exactly what those folks at the door were counting on. But instead of running to fetch my latest bill, I slammed the door in their faces.

Why would I do that? Because I happened to know their story wasn’t true. It was just a scam to trick me into switching power providers.

It’s just one of several scams related to your home utilities – particularly, your electric service. Some of them involve people coming to your door, as they did at my house; others are usually carried out by phone or email. Sometimes, they woo you with the promise of lower bills or better equipment, and sometimes they threaten you with having your service cut off. But in every case, what the scammers really want is to line their own pockets at your expense.

Here are six common utility company scams to watch out for.

1. Door-to-Door Sales Scams

Door To Door Sales Man Walking Discussing

Back in the 1990s, Congress gave the states the option to deregulate their energy markets. If a state chose to deregulate, consumers in that state would no longer have to buy their electricity from their local utility company. Instead, several companies would compete to supply electricity to them.

So far, 17 states and the District of Columbia have chosen to deregulate. In these states, consumers who choose to switch have two different power companies: a power provider that produces the electricity they buy and a power utility that maintains the grid. There are also 27 states where natural gas users can choose their gas provider.

The goal of deregulation was to create more competition for consumers, helping them lower their bills. Unfortunately, in the process, it also gave rise to a new type of scam: fake energy sales.

How the Scam Works

In states with deregulated energy markets, power providers sometimes market their products door-to-door. Salespeople come to people’s houses, let them know they have the right to choose a power provider, and ask if they’re interested in switching. In some cases, agreeing to this can be a good idea. It can allow you to buy electricity for a lower price per kilowatt-hour (kWh) than your utility charges, or to buy renewable energy for your home without the trouble of installing solar panels.

However, sometimes the people who knock on your door don’t just tell you about their products and offer you a chance to switch. Instead, they try to trick you into switching using a variety of sneaky tactics:

  • Teaser Rates. The salesperson tells you that you can qualify for a special, discounted rate, but only if you sign up on the spot. That encourages you to sign quickly without bothering to read the fine print. If you do, you’ll learn that this special low rate is only a “teaser” introductory rate that lasts for the first few months. After that, you keep buying your power from the same supplier, but at their regular, much higher rate.
  • Saying It’s Required. If you live in an apartment complex, a salesperson may tell you that everyone in the complex routinely selects a new power provider every year or every season. In reality, you can switch providers any time you want, and it’s never required.
  • Slamming. The most blatantly illegal practice these scammers use is called slamming, or switching you to a new power provider without your consent. Someone comes to the door posing as a representative from your local utility and asks to see your latest bill. Sometimes, they tell you there’s a problem with your account; sometimes, they say they want to see if you’re getting the best rate or paying an unnecessary charge, like the scammers who came to my door did. Actually, they want to see your bill so that they can copy your utility account number. Once they have this information, they can switch you over to another provider. Unless you look closely at your bill, you won’t even realize they’ve done it.

How to Tell It’s a Scam

You could protect yourself from this scam by refusing to open the door to anyone you don’t recognize or anyone in a power company uniform. However, some door-to-door energy salespeople are legit, and they might even be able to offer you a good deal. Here are a few ways to tell the real salespeople from the scammers:

  • They Won’t Identify Themselves. They say they’re from “the power company” or “your local power company,” but they don’t give an actual company name. Or they claim to be from your local utility, but they can’t produce any ID to prove it.
  • They Ask to See Your Bill. Anyone who’s really from your local utility should already know what’s on your bill. After all, they’re the ones who sent it. If they wanted to see a copy, they could just pull it up on their computer rather than come to your door and ask for it.
  • They Use High-Pressure Tactics. They admit they’re salespeople, but they then try to get you to switch providers without reading the contract. They tell you they’re in a hurry and need your signature right now, or they suggest that you don’t have a choice about switching.

What to Do

Here’s how to protect yourself from this type of scam:

  • Always Ask for ID. Don’t assume that a clipboard with a company logo, or even a company uniform, means that the person you’re talking to works for your local utility. Ask for real identification, such as a badge or card with a photo on it. If they’re really from the public utility, they’ll have ID.
  • Never Show Your Bill. Don’t show your bill to anyone, even if you believe they really are from the utility. And don’t provide any other personal information, such as your Social Security Number (SSN) or bank account info.
  • Always Read the Contract. If you decide to switch power providers, read the entire contract – fine print and all – before signing it. Look for details on the cost per kWh, how long that rate lasts, what happens when the introductory rate ends, and whether there are any sign-up or cancellation fees. If the salespeople pressure you to sign before you’re ready, don’t hesitate to shut the door in their faces.
  • Do Your Own Research. If you’re interested in switching power providers, don’t wait for someone to show up on your doorstep with an offer. Instead, do some research on your own to compare different providers in your area. That way, you can look at multiple providers and see which one offers the best rates. To get started, visit the website of your state board of public utilities or search for the term “energy choice” plus the name of your state.

2. Power Shutoff Scams

Electric Company Monopoly Pay Collect Money

Power shutoff scams are a type of phishing scam in which hackers pose as representatives of a company you do business with to get money from you. In this case, they pretend to be from the electric company, and their strategy for getting money out of you is threatening to shut off your power.

How the Scam Works

This scam can take several forms. Sometimes, you get an email that looks like it’s from the utility, claiming that the company is going to shut off your power because you haven’t paid your electric bill. In other cases, you get a phone call with the same information, or a person just shows up at your door.

However, the next part of the scam is always the same: The scammers say you must pay your bill immediately to avoid having your power shut off. Sometimes, they request your bank or credit card information. Other times, they ask for payment in a form that’s harder to trace, such as a wire transfer, prepaid debit card, or even cryptocurrency. Scammers who come to your door may even ask you to pay in cash on the spot.

In 2016, an ABC news team in West Palm Beach, Florida caught one of these door-to-door scammers on camera. He was pestering a homeowner about her “unpaid bill,” refusing to show ID, and repeatedly changing his story in response to her questions. When the criminal realized reporters were following him, he physically assaulted one of them before running away.

How to Tell It’s a Scam

Of course, real power companies do sometimes contact you if your bill is late, and they can cut off your power if you fall too far behind. However, there are several ways to tell a legitimate request from a scam.

  • They Come to Your Door. If someone shows up at your door to demand money, that should tip you off right away that it’s a scam. Your real utility company will not send someone to your home without alerting you beforehand. If your payment is late, they’ll usually notify you in writing.
  • They Demand Immediate Payment. Some companies may call you to let you know your bill is past due, but they’ll never insist that you pay immediately over the phone. Instead, they’ll tell you how to pay your bill through the company website or some other standard channel.
  • They Request an Untraceable Payment. Another red flag is asking for payment by wire transfer or prepaid debit card. Most utilities don’t even accept these forms of payment, and no utility will ever insist on them. So far, only one U.S. power company, GridPlus, accepts payment in cryptocurrency, and that’s only in certain parts of Texas.
  • They’re Angry or Threatening. Real representatives from your power company should be calm and professional, even if they’re calling you about an unpaid bill. If the email or the person on the phone takes a hostile or threatening tone, it’s probably a scammer.
  • You Know You Paid Your Bill. If you know you already paid your bill, you should be suspicious of anyone telling you it’s past due. Yes, it could be a mistake on the utility’s part, but it could also be a scam.
  • You’ve Received No Prior Notices. Even if the power company somehow never got your payment, they can’t simply cut off your electricity without warning. They have to send you a series of notices first, telling you about the overdue bill and giving you a date to pay it before they shut off your power. If this is the first time you’ve heard about your payment being late, it’s probably a scam.

What to Do

If you actually are behind on your electric bill, you want to make sure you pay it before your power gets cut off. If you get an email, phone call, or visitor threatening to cut off your electricity, here’s what to do:

  • Don’t Trust Your Caller ID. Even if the call appears to come from the real electric company, that’s no proof that it’s legit. These days, call spoofing software makes it very easy for spammers to make a call appear to come from any number they want.
  • Don’t Give Them Anything. Even if you think a call or email might be legitimate, don’t hand out any payment information or any other personal information. That’s especially important if you’re asked for an untraceable form of payment such as cryptocurrency, wire transfer, or prepaid debit. Once you’ve made a payment in this way, it’s almost impossible to get the money back.
  • Check Your Real Account. If you’re concerned that you may really be behind on your electric bill, contact the utility to check. You can log in to your account on the company’s website or call its toll-free number to check your account status. However, make sure you’re using the company’s real website or phone number as shown on your bill. If you click a link in an email, it’s likely to take you to a spoofed website that may look like the utility’s real site. Likewise, phone scammers sometimes tell you to call them back at a fake phone number that uses an exact replica of the real energy company’s recorded welcome message.

3. Power Restoration Scams

Power Company Worker Employee Control Room

A power restoration scam is the reverse of a power shutoff scam. Instead of threatening to shut off your electricity, the scammers offer to help you get it back – for a fee.

How the Scam Works

This scam shows up in neighborhoods that have lost power due to a storm or other natural disaster. Scammers dressed as electric company workers go from door to door, offering to restore your power for a one-time payment. Scammers may also contact you by phone if you have an old-fashioned landline that works without power.

Sometimes, the scammers tell you that you must pay a fee to get your electric service back. Other times, they say you’ll get your power back eventually, but you can pay a fee for an “express service restoration” to get it back faster.

In reality, these people don’t work for the power company. They can’t and won’t get your electricity back. All they will do is take your money and run.

How to Tell It’s a Scam

This is an easy one. Any time anyone offers to restore your power for a fee, it’s a scam, period. Only the real utility company can restore your electric service, and they have to do it for free. Paying a fee won’t get it done any faster.

What to Do

That’s easy too: Just shut the door or hang up on the caller. Don’t even bother to ask questions. It’s definitely a scam, so don’t waste a minute of your time on it.

4. Replacement & Repair Scams

Analog Electric Meters

Occasionally, your real electric utility needs to make repairs or replacements to equipment in your house, such as your electric meter. Scammers take advantage of this fact by posing as utility workers and trying to charge you a fee for new equipment.

How the Scam Works

This scam usually occurs by phone. Someone claiming to be from the power company calls you and says they need to make some changes to the equipment in your home. They may claim they need to make repairs, replace your electric meter, or upgrade you to a new smart meter.

The callers then demand upfront payment for this “necessary” service. If you refuse to pay, they may threaten to cut off your electricity.

How to Tell It’s a Scam

Some versions of this scam go to great lengths to make the call look legitimate. They may call you from a spoofed number, set up an appointment for the installation, and give you a fake call-back number.

However, there are a few ways to tell that the call is a fraud. Your real power company usually won’t replace your meter unless you report that it’s damaged. If they do need to replace or upgrade it, they’ll contact you ahead of time to let you know. And finally, if there’s any charge for the new equipment, they’ll simply add it to your electric bill rather than asking for a separate payment.

What to Do

Treat this like any other scam. Don’t pay a fee or give out any personal information over the phone. If you think the message might be legitimate, contact your utility to check. Make sure to call its official number or visit its website, rather than using a call-back number provided to you over the phone.

5. Fake Federal Programs

Door To Door Survey Questionaire

This is a particularly nasty scam that preys on people who are struggling to get by on a tight budget. The scammers offer them help with their utility bills, but instead, they either steal their money or seize their personal information for purposes of identity theft.

How the Scam Works

Scammers contact you to tell you about a “special federal program” that can help cover the cost of your energy bills. They may reach out to you in several different ways, including phone calls, emails, text messages, social media, and door-to-door visits. They also post fliers in low-income neighborhoods where they think people are likely to need help.

Once they have you on the hook, they start trying to get information out of you. They tell you that to sign up for the program, you’ll have to provide some personal information, such as your name, address, and SSN.

Once they have that info, they move on to the final step: getting their hands directly on your money. They tell you that in future, when you get your electric bill, you should direct your payment into a new account instead of sending it to the utility. They provide you with a phony bank routing number to use for your payments, then sit back and collect all the money you pay into that account. Meanwhile, your bills are going unpaid, and you probably won’t realize it until you start getting overdue notices from your utility.

How to Tell It’s a Scam

In reality, there is no federal program to help users pay utility bills – at least, not exactly. The Low Income Home Energy Assistance Program, or LIHEAP, receives federal funding, but it’s run at the state level. Some states also have their own separate funds to help with energy bills, such as California Alternate Rates for Energy (CARE) and New Jersey’s Universal Service Fund (USF). In addition, some utility companies offer payment assistance programs to help customers who have trouble paying their bills.

However, none of these programs advertise their services by calling or emailing people randomly or knocking on doors. Most of them have enough trouble meeting the needs of the people who are already signed up; they certainly don’t have to go looking for more customers. Any energy assistance plan that’s actively seeking out customers is most likely a scam.

What to Do

If you get a message about an energy assistance program, don’t sign up for it or give out any of your personal information. Instead, visit Benefits.gov to search for real energy assistance programs in your state. You can also check out your utility company’s website to see if it offers any programs to help you with your bills.

6. Utility Company Imposters

Female Utility Company Employee Walkie Talkie

Most utility company scams work by tricking you into handing over your cash or your personal information. However, some criminals take a more direct approach: They pose as utility company workers to get into your home, then steal your stuff.

How the Scam Works

Criminals show up at your door, often wearing a uniform with your energy utility’s logo on it. They use a variety of tricks to get you to let them into your house, such as saying they need to inspect your fuse box or electric meter. Once they’re inside, they find some way to keep you busy while they search for things to steal.

For example, the New York Post reports on a 2014 case in which two fake Con Edison workers got into a senior citizen’s home by telling him they needed to check the fuse box. They then plugged in a light and told him to wait in the basement and watch to see if it changed color. Meanwhile, they ran upstairs, searched the house, and made off with $70,000 in cash hidden in a dresser drawer. In another case reported by WXYZ Detroit, a phony utility worker pushed his way into a home and held the homeowner at gunpoint.

Often, these criminals work in pairs so that one of them can keep you distracted while the other looks for valuables. For instance, they may ask to see your bill, then talk to you about ways to lower it. In a version of the scam described by FirstEnergy Corp. of Ohio, two criminals posed as tree trimmers working for the utility. One of them walked the property with the homeowner examining the trees, while the other looted the home.

How to Tell It’s a Scam

As noted above, utility companies rarely send someone to your door without contacting you ahead of time. They don’t want to waste their employees’ time by sending them to a home that might be empty. If they need to examine or repair anything inside your home, they will make an appointment first and send out a worker with identification. Anyone who shows up unannounced and refuses to show a photo ID is probably a fake, even if the uniform they’re wearing looks real.

What to Do

If someone shows up without warning claiming to be from your utility company, here’s what to do:

  • Ask for ID. A real utility company worker will have an official form of ID that includes a photo. Ask to see it. If the worker won’t show it, or if they produce an ID that looks unconvincing, make them wait outside while you call the utility to confirm that the worker is legit.
  • Don’t Let Them In. Unless you can confirm that the person you’re talking to is a real utility worker, don’t let them into your house. Also, don’t leave the house unattended to go outside with them. If you feel at all unsafe, shut the door and lock it.
  • Don’t Show Your Bill. If the so-called utility workers ask to see your bill or for any other personal information, don’t give it to them. Your real utility company already has all the personal information about you that it needs.

Final Word

If you’ve fallen victim to any of these utility scams, report the crime to the police. Don’t be embarrassed about admitting that you fell for a con; you’ve got plenty of company. When ABC News sent a reporter to people’s houses disguised as a utility worker, six out of seven homeowners let him in without asking for ID.

If you’ve managed to avoid a scam, good for you; you’re smarter than the average homeowner. However, you can still help others out by reporting the criminals to the local police and your energy provider. The more they know about these scams, the better their chances are of catching the criminals before they can victimize more of your neighbors.

You can also report the crime to the Federal Trade Commission (FTC) using its Complaint Assistant tool. The FTC can’t deal with your complaint personally, but it may be able to use the information you provide as part of an investigation. Your information can also help the FTC warn the public about these crimes through its Scam Alerts page.

Have you ever experienced or witnessed a utility company scam? What happened?

Amy Livingston
Amy Livingston is a freelance writer who can actually answer yes to the question, "And from that you make a living?" She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.

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