3 Types of Energy Scams and How to Avoid Them

Each year, energy utility scams slap vulnerable small businesses with hundreds of thousands of dollars in unforeseen utility charges. Each using different strategies to convince business owners and consumers to pay more or give up sensitive information. In order to protect yourself against utility scams it is important to be educated about what scams are out there. 

A scammer is usually an uninvited stranger acting as a worker from your utility provider or your current energy supplier. Sometimes they will even pretend to be an energy broker. Their main goal is to retrieve private information from you so that they can scam you into a contract that can hurt you and your business.  More often than not, they start by informing you that you're behind on your bill or that you need to pay for some electricity service they performed at your property, all of which is not true, or valid. To take things further, sometimes they will tell you that if you do not pay now, this bill will result in your power being cut off.

Imposter scams can come in many forms, including over the phone, in-person/door-to-door sales agents, and through email.

Utility Scam 1: Phone scam

With a phone scam a business owner will receive a phone call from a person claiming to be calling on behalf of either, your local utility company, your current energy supplier, or your current energy broker. They will introduce themselves and typically follow up with a time-sensitive message. 

Here are some things to listen for:

• “We noticed that you are overdue a payment on your utility bill. I am calling to let you know that our service will be shut off if you do not submit a payment today.”
• “There’s a recent rate hike in your utility. To opt out and apply for a discount, please obtain a copy of your bill, so I can show you the next steps.”
• “There’s a recent rate hike. To sign up for discounts, please send me your fax, or email information, so I can send you a letter to sign off on. This letter will allow me to shop around and protect your accounts from any rate increases.”
• “Hello, I am calling to let you know that your current utility plan is expiring. It is my job to call you and make sure you sign up for a low rate prior to your contract termination.”

A scammer will very often be pushy and so convincing that you may be scared into paying them money directly, or even worse, providing them information that can turned into a disaster of an energy contract.

Utility Scam 2: In-Person

Sometimes you will get an actual in-person visit from an uninvited person who is claiming to be acting on behalf of  either, your utility company, your energy provider, or your energy broker.

A classic example of an in-person scam involves an uninvited person showing up at your door. They will say something like:

• “You're behind on your bill, may I "inspect" your business (or home?)

This person may ask for payment for something they “fixed.” In-person scammers will try to take your money and acquire information from your utility bill. Sometimes they will be aggressive and pressure you into signing routine documents. These documents usually end up being permission slips to shop energy rates on your behalf. 



Utility Scam 3: Email Scam (Phishing)

One very common scam is the email scam, or phishing. Much like the other scams, this is a fraudulent email that appears to have been sent from your utility company, energy supplier, or energy broker.  It often states that your bill is overdue,  that there's an error on your account, or that your billing information needs to be updated. 

After the “issue” with your bill is explained, the email may ask you to follow a link and enter sensitive information like your legal entity, account number, and address. Email scams can result in malware being downloaded and installed unintentionally, which can extract sensitive information right from your computer.

Additionally, business owners should be on the lookout for emails requesting an electronic signature via mediums like DocuSign, or Adobe Sign. Please use caution when signing any e-signature prompt.