scam-alert

Scammers target utility customers with threats of power shut-off

Oct. 9, 2013 at 1:10 PM ET

Email Notice
Duke Power
Duke Energy recently emailed this fraud alert to residential and business electric customers to warn them of the ongoing scam.

Fraudsters have developed a clever and all-too-successful ruse to steal money from homeowners and small businesses across the country.

All it takes is a phone call and a bunch of convincing lies.

These phone bandits claim to be from your local power company. They pretend they’re calling to let your know your account is delinquent and unless you pay right away the service will be disconnected. To add credibility to this con, they often use “spoofing technology” that makes your caller ID display the name and phone number of the local utility.

“It’s a despicable scam,” said North Carolina Attorney General Roy Cooper. “They’re trying to scare you into giving them money by threatening to take away something that’s critically important to you. And they know that if they do this enough, they’ll get a few people who will do what they want.”

Earlier this year, they got $890 from Randy’s Pizza in Durham, N.C. The call came right in the middle of lunch hour. The caller, who claimed to be with Duke Energy, said they’d be shut down in 45 minutes if the bill wasn't paid.

“When you’re in business and someone tells you they’re going to shut off the power, you've got to do something,” said co-owner David Kolenberg.

Kolenberg was sure the bill had been paid, but couldn't take a chance. So, he did as instructed. He went to a nearby store, bought a Green Dot MoneyPak card (a prepaid debit card) and then called the scammers back and gave them the information to access the money.

“We were vulnerable,” Kolenberg told me. “There wasn't a lot of time to think about it. We just responded to keep the lights on.”

Duke Energy received so many reports about these deceptive phone calls from customers in its service territory (North and South Carolina, Ohio, Kentucky, Indiana and Florida) that it has launched a public awareness campaign. It included radio commercials, a message on billing statements, social media outreach, plus a fraud alert email sent to both residential and small business customers.

“We are never going to call and threaten immediate service disconnection,” said Duke Energy's Kristina Hill. “And we are never going to say go to the store, get a prepaid card and call us back.”

It’s happening all across the country

When a scam works, it spreads. And that’s what’s happening with this one.

“We’re seeing some pretty active and pretty aggressive scamming right now,” said Warren Bamford, head of security at National Grid which provides electricity to customers in parts of Massachusetts, New York and Rhode Island. “Everybody needs electricity, so if someone calls and threatens to shut it off, that certainly gets your attention,” Bamford said.

And that’s what these crooks have going for them. Many victims say they suspected something didn't sound right, but were afraid of what might happen if they didn’t pay up. Homeowners have lost hundreds of dollars this way. Small business owners — especially those with big electric bills — have been taken for thousands.

The utility swindlers took the owner of Love’s Fish Market in Little Rock, Ark., for $850. A month later, they tried to con him out of more money. That’s very common with this sort of scam — the crooks figure if someone fell for it once, they may fall for it again.

“I think it’s a crying shame that they’re doing this to people,” said Lee Scott who works at Love’s. “To take people’s money like this, they’re just the lowest of the lowest. They need some jail time.”

But that’s not likely to happen. In fact, since many of these scammers are calling from outside the country, there’s very little chance they’ll get caught. And that’s why they like to use Green Dot and other prepaid debit cards.

“These cards are like cash. It’s like taking cash and putting it in someone’s hand,” warned Jim DePriest, deputy attorney general of Arkansas. “Once a crook has the information from that card, they can drain the money loaded on it anywhere in the world — remotely and anonymously.”

Protect yourself 
Fraud experts say this scam is going to be around for awhile, so you need to be alert and know the warning signs. This scam is easy to spot once you understand how utility companies operate.

Your power company will never call you and threaten immediate service disconnection. A lengthy process takes place before the plug is pulled. Typically, multiple written notices are sent to the customer when the account is delinquent.

Your power company will never call and demand payment via a prepaid debit card.

If you get a call like this — hang up. The caller might insist he is with your power company. The caller ID on your phone might display the name of your utility. Hang up — it’s a scam.

If you’re concerned about your account, call the utility using a number you trust — from an old bill or look it up on the web. Don’t use the number that’s on your caller ID.

Fall for this scam and you will never see your money again. So slow down, think and don’t let some crook pressure you into handing over your hard-earned money.

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.

TOP