In 2021, the Federal Trade Commission (FTC) received 5.7 million incident reports in the consumer marketplace. About half of those were identified as fraud and a quarter as identity theft. Those statistics don’t tabulate utility fraud specifically, but the Better Business Bureau says it receives about 1,000 complaints of utility scams each year.
Let’s look at a few common scenarios of utility scams:
- You receive a random call. The caller says you didn’t pay your last electric bill and your power will be cut off immediately––unless you pay right now by credit card over the phone. Caller ID shows it came from the utility; they even told you the exact amount of your most recent bill.
- You receive an alert that you overpaid your utility bill and to get the refund, you need to provide your financial information.
- A friendly couple in uniform knocks on your door saying they’re from the power company and are following up on high-bill complaints from your neighbors. They just need to take a look at your utility bill so they can get the information code to make sure you aren’t being double-charged.
These real-life stories may seem like obvious scams. Who would ever fall for them? It turns out about one in four people.
Scammers take you by surprise
While most people do the right thing and hang up the phone or contact their utility rather than handing over money or private information, more than $6 billion in losses to various scams were reported in 2021. According to Utilities United Against Scams, the typical cost for each victim who lost money was about $500.
Reading about avoiding utility scams makes it sound pretty simple. But the thing about scammers is they take you by surprise. They might be the most charming people you ever met. Or they might be mean and intimidating, bullying you into acting. It can be hard to say “no” in the moment. One busy businessperson ended up handing over $1,000 just to get through another one of the day’s fast-paced distractions.
Scammers are notorious for recognizing when people are most vulnerable—Christmas, right after a hurricane or tornado, or with the approach of really hot or cold weather. Fraud reports skyrocketed during the COVID-19 pandemic—FTC figures show complaints rising from almost 3.5 million in 2019 to more than 5.5 million in 2021.
The latest trends in utility fraud
Con artists keep up with technology—they’ll come at you through email and texting. In one of the top recent scams, you’re told to pay by gift or cash card, giving the swindlers the card and PIN number so they can have easier access to your money. (Hint—a utility will never ask you to pay by gift card.)
Another new scheme tells you to pay your bill with cryptocurrency. Your electric co-op will not require you to pay by bitcoin or similar methods.
The best way to avoid being a victim of a utility scam is to call your electric co-op directly. Scammers will try to rush you into acting, but no billing situation is so urgent you can’t check on it.
If you do lose money on a scam, don’t be embarrassed. Report it to your electric co-op. The state attorney general is responsible for going after fraud and will want to know about any suspicious schemes. You might even be able to get your money back.
Letting the appropriate contacts know about a scamming operation can help protect others in our community and let you feel secure in enjoying your electric service.
Paul Wesslund writes on consumer and cooperative affairs for the National Rural Electric Cooperative Association, the national trade association representing more than 900 local electric cooperatives.