FAQ: How Can I Spot an Energy Scam?

How to Spot an Energy Scam

By AJ Brockman

In 2018, there were 63,626 reported cases of utility fraud in the US.

Can you imagine what that number would be if everyone reported every single energy scam they experienced?

Unfortunately, energy scammers typically target residential users. But even though you’re a commercial or industrial energy consumer, you’re not immune to scam attempts.

Here are two common energy scam attempts you may have experienced (or, sadly, might at some point):

Scam #1: Phone Call/Email from a Fake Energy Company

When someone calls you saying your power or gas is going to be shut off unless you pay ASAP, your heart races and your brain goes 100 miles per hour. “Did I forget to pay my bill??”

Chances are: No, you didn’t.

But these scammers operate on fear and knee-jerk reactions, which are powerful responses.

Luckily, there are a few ways you can spot this type of scam. Keep an eye/ear out for:

1) “Your service will be shut off immediately…”

That’s never the case with utilities or third-party suppliers.  If you’re behind on payments, they’ll send you an initial notice that contains your overdue balance.

If you’ve missed so many payments that your account could actually be disconnected, your utility or supplier will send you a formal Notice of Disconnection (typically mailed to your facility) that includes an estimated shut off date and time.

2) “…unless you submit payment in the form of gift cards/prepaid debit cards/money wire/PayPal/Venmo.”

These aren’t standard payment methods for utilities or suppliers.

3) Vague details about your “contract.”

A scammer will most likely say something close to “when your contract expires in a few months.” If they’re calling from your current supplier or broker, they should be able to tell you your exact contract end date (ex. November 30, 2019). If they can’t give you specifics, don’t trust them.

If you’re supplied by your local utility, you don’t have a contract in place. Therefore, it’s a scam.

Scam #2: Slamming

Slamming is when someone claiming to work for an energy company switches you to a different supplier or signs you up for third-party supply without your consent.

It’s not as common for C&I customers as the phone and email scams. But it’s been happening so frequently in the residential space that some states — including Maryland and Illinois — are cracking down on shady suppliers.

Do brokers and consultants slam?

If they have good business practices, no.

Although brokers and consultants can help you switch suppliers, they’ll never sign a contract on your behalf. And they won’t put you with third-party supply without your knowledge.

They’ll usually ask you to sign a Letter of Authorization (LOA), which allows them to receive pricing and usage information for your account. But this doesn’t give them permission to sign contracts for you.

How To Protect Yourself From Scammers

1) Know your account status.

  • If you’re currently under contract with a third-party supplier, who are your with? When does your contract expire?
  • Are you up to date on your payments?

2) Check the URL of the email address or do a reverse phone lookup.

  • A quick Internet search of the URL (after the “@” in an email address) should pull up the company’s website if it’s legitimate.
  • If people have received spam attempts from number in question, you’ll most likely find it reported online.

3) Ask about an LOA.

  • Brokers and consultants should ask you to sign one, and in some states it’s a requirement.
  • But look over the LOA’s language carefully to confirm it doesn’t allow them to sign contracts on your behalf.

4) If you’re still not sure, check with your broker/consultant/supplier/utility.

  • They’ll tell you if the call or email came from them.
  • And if it didn’t, they’ll help you report it.

It can be scary (not to mention annoying) to receive an energy scam call, and these days they’re harder to identify. Keep these warning signs and tips in mind the next time you receive a call from an unknown number.

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