You might be aware of energy scams if you live or own a business in a deregulated energy state. Unfortunately, energy fraud occurs regularly in states where consumers can shop for third-party energy suppliers. This article outlines the different types of common energy scams in the marketplace, how to avoid them, and what to do if you think you’ve been scammed.
What Are Energy Scams?
Energy scams happen when something unauthorized happens to your electricity and/or natural gas bill. This could be as simple as an energy supplier or energy broker getting a hold of your utility account number and enrolling you in an energy plan with a supplier in a deregulated state. Either way, it is important to recognize the signs of energy fraud so that you can protect your accounts and yourself from a potential scam. There are several common types of energy scams and fraud that occur quite often.
Unauthorized Switches
One of the most common types of energy scams in deregulated energy markets is the unauthorized switch. In the energy industry, this is also known as “slamming”. Slamming happens when an energy sales representative uses your utility account information to sign you up with a supplier without your consent. This is often done in an attempt to earn a commission or profit from your electric account with the hopes that you will not notice the change. If your account is slammed then you might receive an account drop notification from your existing energy provider.
Identity Theft Using Energy Fraud
Another scam to be on the lookout for is bad actors pretending to be your utility company. If someone calls you on the phone or knocks on your door telling you that they are with the local utility company, chances are they are lying in an attempt to get personal information from you. This is also known as a “phishing” scam. Be weary about providing these people with your date of birth or social security number without verifying their identity first.
Energy Contract Fraud
Sometimes the fraudster is blatant about their scam and does it right in front of your face. Energy contracts can be confusing to understand, and interpreting the details of the contract sometimes requires a law degree. Some energy scammers will lie to you about the terms of the contract in order to get you to sign. They can lie about the total energy rate, the fixed components of the rate, and even the contract term.
Do Energy Scams Happen Often? Is Energy Fraud Really A Thing?
Unfortunately, energy scams are more prevalent than you think! With many bad actors trying to take advantage of unsuspecting customers, energy fraud occurs on a regular basis. Most fraudsters present themselves as legitimate representatives from utility companies or other energy firms in an attempt to defraud you.
Who Is Most At Risk To Be Scammed?
Anyone is really at risk to fall victim to energy fraud. Since the rules of energy deregulation are so complicated, it is easy to believe a good lie. Statistics tell us that most victims of energy fraud are residential customers since they are the least aware of energy deregulation. Although business owners tend to be savvier with their vendors, they are not exempt from this fraud either. Some of the largest commercial energy consumers in the country have been victims of energy fraud.
How Energy Fraud Works
Energy fraud and scams take on many shapes and sizes. Here are some of the most common ways scammers attempt to deceive energy consumers.
Telemarketing
Phone scams are the most common form of fraud in the energy industry. Since these scammers can be located anywhere and are safer from prosecution, they tend to be brazen with their tactics. Beware of odd phone calls, robocalls, or people on the phone pretending to be your local utility company or energy supplier.
Door-To-Door Energy Scams
Similar to the unauthorized switch scam described above, door-to-door salesmen will sometimes misrepresent themselves in an effort to look at your electric bill, get your account number, and sign you up without your knowledge. We’re not saying that all door-to-door salesmen are bad, but just be weary about how they represent themselves. They should be upfront with you about what they are selling, the details of the energy rate, and be able to explain the terms of the contract.
Email & Text Messaging
Have you ever received an odd email or text message to your phone? Sometimes these messages can be a form of phishing in an attempt to get you to give up personal information. It is always best to check the sender’s email address or phone number. If you do not recognize it, then ignore it! Be sure not to click on any links in the emails or text messages as sometimes these are attempts by computer hackers to get on your device.
What To Do If You Think You’ve Been Scammed
If you think you fell victim to an energy-related scam, then following these steps can help you to lessen your risk exposure. Some of these tips can also be used to prevent an energy scam from happening to you.
Contact Your Local Utility
The first step is to contact your local utility company. They have all of your energy account information on file and can tell you the details about your utility bill. If you think you were switched to an energy supplier without your consent, the utility company will be able to tell you and even switch your account back for you. The utility can also verify if the person calling or knocking at your door actually works for them.
Freeze Your Credit
If you gave out any personal details to the scammer (DOB or SSN), then it is critical to freeze your credit profiles with each credit bureau. This will prevent the scammer from being able to open up any accounts in your name and can even help you track down the fraud. You can place a freeze on your credit profile by contacting the three major credit reporting agencies: Equifax, Transunion, and Experian.
Sign Up For Identity Theft Monitoring
There are several identity theft prevention tools and services on the market. Programs like LifeLock are great for monitoring the use of your social security number across the internet and with different companies. If you gave out your personal information, then investing in a tool like this could be valuable.
Remove Your Utility Account From Any Public Lists
A great way to prevent any future energy fraud, particularly slamming, is to remove your utility account details from any public lists. Most utility companies publish a list of customer utility account information that is available to suppliers and licensed energy brokers. Unfortunately, some scammers within the energy sector can use this information to sign up your account without your knowledge. Calling your utility company and requesting to be removed from the public customer list is a surefire way to protect your account.
Need Help Fighting Back?
Energy fraud is no joke, and when it happens to you, it can cause great stress and even the loss of money. At Diversegy, we help our customers protect their energy accounts from scammers and fraud. If you are the victim of an energy fraud, contact us to discuss the best course of action to prevent future fraud and to lessen your exposure.
