Identity Theft Scam Targets Utility Customers Nationwide

< Go back

Will President Obama really pay your utility bill? That’s what a new scam directed at unsuspecting utility customers claims. It is the latest in identity theft schemes, designed to convince victims that the federal government will, for one time only, pay their utility bills. And it has gained surprising momentum.

Incidents have been reported nationwide, including instances of door-to-door visits in which the scammers present information for consumers regarding a supposed federal government assistance program that is available to cover individual utility bills. “Even the savviest of consumers are being taken by this scam,” said Frank Caliva, senior consultant for the American Coalition of Competitive Energy Suppliers (ACCES). “I don’t think it’s necessarily that this particular con is so clever, but more a testament to the fact that people still don’t fully understand how energy choice works and are even more vulnerable in today’s economy.”

ACCES, a group of competitive natural gas and electricity suppliers committed to consumer education, hopes to inform as many people as possible of this widespread scam in order to slow its proliferation.

So what should you look for? The scammers have been handing out leaflets containing information on a “federal government plan” – a supposed bailout program authorized by President Obama himself. The program, they claim, will pay a consumers energy bill only once. The leaflets also contain a website address where customers can register for the program, and a bank account and routing number they will need when making the actual payment. After logging into the website, customers are asked to provide their social security number and other personal identification information. Once registered, the customer can use the account and routing numbers they were provided to make payment to their utility.

What makes this particular scam so effective is the fact that a customer may not become aware that the bank information they used to pay their bill is invalid until well after they have submitted the payment. This is because there is often a lag between when a customer submits payment information and when the utility company verifies it. By the time the customer finds out and the utility begins to notice a pattern, thousands of fraudulent payments have been processed and individuals’ identities stolen.

ACCES warns energy consumers to be wary of any offers that seem suspicious – whether they come through an in-person encounter, via the internet, in the mail or over the phone – and offers the following tips for consumers to protect themselves against fraud of this nature:

  • Use common sense. In this case, the old idiom rings true; chances are that if an offer sounds too good to be true, it probably is.
  • Official door-to-door energy marketers are required to wear and provide identification. Ask representatives to identify themselves with their full name, their employee/badge number and where they are calling from. Record this information – it may come in handy later.
  • Never provide your social security number, bank or other personal information to a stranger. If you are signing up for energy service with a supplier – be sure the company representative has provided you with complete information and credentials to convince you that the supplier is legitimate before providing personal information.
  • If you are unsure about an offer you have received, call your utility company or competitive energy supplier to verify its legitimacy before you do, provide, or sign ANYTHING.

“The unfortunate reality is that there are criminals who will try to exploit utility customers as they have consumers in many other sectors,” said Caliva. “ACCES is working to help educate and better prepare consumers to deal with this type of situation. In the meantime, however, the best defense against threats of this nature is strong consumer education.”

Download this News Release

< Go back