How to Avoid Utility Scams

In cold states, such as Ohio, it is well-known that once temperatures start to drop, electric and gas bill prices start to rise.  “Utilities are literally your lifeline”1, considering your gas keeps you warm in the winter and electricity keeps your lights on. Scams come in different forms and scammers carry different techniques to try to intimidate and dissuade you. Don’t let your debt rise along with your gas bill charges. Here’s how to keep from being shocked:

The Slamming Scam:

Did you know that in some states (yes, Ohio is included) you can choose who provides your electricity and natural gas? These companies will “join the market and supply energy distributed by your utility company or from a green supplier. […] They can do so because they are not regulated and are able to buy energy on the open market” 2 And the way these companies can compete with such trusted staples like FirstEnergy and Dominion Gas? Offering lower monthly prices, of course.

Unfortunately, with this new market comes company scams involving door-to-door salesmen and phone calls. Scam artists are aware of this need for your life source, so they can do what they can to scam you with threats and unnecessary charges.

“[S]lamming,” the illegal practice of switching customers to another provider without their consent.3

  • Theft of a Salesman. So, you have a salesperson at your door offering cheaper prices for your ever-climbing utility bill. How most of these companies succeed in their scam is that they offer an introductory price – a price significantly lower than your current bill. Once this introductory time period expires (after the first couple months, say) your bill begins to sky-rocket. In some cases, the salesperson themselves is getting scammed. Companies can offer them an opportunity to help people without supplying underlying information.
  • Termination Fee. So you realized that you have been sucked into a scam. Unfortunately, another way these companies can empty your pockets is by charging you an early termination fee.

Other common utility scams:

The Threat. Some scammers will call and threat that your service will be shut off due to unpaid bills. They claim that you can recover and pay immediately. Utility companies will not call you if you have past due bills. You will receive such notices by mail. Dominion Gas, for example, states that they would not contact you via phone, warning not to succumb to threats: “If you have a problem paying your bills, we will work with you to figure out a reasonable payment plan — we do not threaten you.”4

Service for Cash.  It is not unusual to experience an outage when the weather is bad. What is unusual is for a service worker from your utility provider to come out to your house to bring back your service for cash. As much as we wish we could have such quick, personalized service – outages aren’t usually centrally located. Don’t sit in the dark hoping for some revival you emptied your wallet for.

The Phone Calls. “We would like to take the time to talk to you about discounts we can offer you…..” Hang up. Utility companies will not call you to offer you discounts or to discuss rates. Consider, also, that scammers can trick your caller ID – making it appear that you are getting a call from your state.

Don’t get shocked.shocked-blog-snip

Do not give out any personal information. This may sound obvious and repetitive, but when you are faced with that name tag and clipboard, it is easy to assume trust in the person in front of you. This also includes information you would assume to be harmless: such as a copy of your utility bill or your account number. Given a previous utility bill, the sales person is able to determine the current cost you are paying and try to offer you a lower price.

The scary part is that all they need is your account number. They can take your account and switch you to a different energy utility company without you agreeing to anything.

There is NO HARM in calling your utility company to verify legitimacy. Many reported BBB utility scam victims claimed they realized too late that their utility company was not associated with the salesperson or caller.

What to ask and what to look out for:

Akron BBB advises utility customers to check your contract before signing on. Such phrases as “rates will change due to supplier’s discretion.”2 are something to be cautious of.  Ask for specifics, do not settle for vague. You can ask your salesperson some questions:

Is this an introductory rate?

When does that introductory rate end?

And what will be the new rate?

Akron BBB suggests you ask this to door-to-door salesmen: Do you have a solicitation license?

What trusted companies will not do:

  • Utility companies will never ask you for cash.
  • Make calls claiming you are eligible for a discount
  • If your electric or gas is in danger of being shut off, most utility companies will send a warning through mail. FirstEnergy provides that their representatives “will not call or email to demand immediate payment or threaten imminent shutoff.”5
  • Send out a representative without prior notice or without request of a service change. According to FirstEnergy’s website, employees do not contact customers to request sensitive information such as social security numbers or bank account information.

*Not every electric company is a scam. Akron BBB suggests such resources as Apples to Apples (provided by the Public Utilities Commission of Ohio) that will compare local utility companies to other options.

Think about a magic trick. The magician can show you something that can appear to be better than reality: a card you thought was lost, a coin you thought was in the magician’s hand. When in all reality, no real magic was ever performed. The hoax can only work if you don’t know what to look for. Know the signs and prevent yourself from a sleight-of-hand agreement.

  1. https://www.policygenius.com/blog/avoid-these-3-utility-scams/
  2. http://www.bankrate.com/financing/saving-money/jean-chatzky-how-to-avoid-an-energy-scam/#ixzz4O6bqdTYD
  3. http://wgntv.com/2016/06/02/alternative-suppliers-scam-homeowners-into-higher-electricity-bills/
  4. https://www.dom.com/residential/dominion-virginia-power/safety/scammers-and-personal-safety
  5. https://www.firstenergycorp.com/content/customer/help/safety/scam-info.html
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