New Utility Scam: Alert from David Lerner Associates
Utility Scam Alert
It seems that there’s no shortage of different kinds of scams thieves have come up
with to try to bilk honest individuals out of their money. Two recent schemes
revolve around the payment of utility bills.
In this scam thieves contact individuals (by phone, text, social media or even showing up at their front
door) and tell them they are eligible for a non-existent federal government program that will pay up to
$1,000 toward their utility bills. The thieves ask for personal identifying information (including Social
Security numbers) in order to supposedly register victims for the program, and then provide them with
routing numbers to fake bank accounts they can use to pay their bills online.
Sometimes victims actually receive confirmation of their payment from the utility, and some have then
told their family and friends about the supposed program and encouraged them to sign up too.
But a day or two later, they are informed by the utility company that the bank account was fake and
their bill in fact was not paid. Meanwhile, with the victim’s personal identifying information in hand, the
thieves may be able to wipe out their financial accounts.
In the other scam, thieves posing as employees of a local utility company contact
individuals and tell them their bill payment is late and their service will be shut off
if they don’t pay it immediately. The thieves instruct victims to pay their bill using
a pre-paid debit card — they tell them to go buy the card and then call them back
with the card number. Then the thieves cash out the card’s value.
One reason experts say thieves are now using prepaid debit cards to perpetrate scams like
this is because the wire transfer services they used to use to steal money in this way have
beefed up their fraud detection systems. Also, it is not usually necessary to produce a photo
ID in order to spend or collect money on a prepaid debit card.
Be very wary if you’re asked to make a payment using a prepaid debit card.
Utility companies will rarely, if ever, ask to receive payment in this way.
Protect yourself from Identity Theft
Never provide personal identifying information over the phone if you did not initiate the
The same goes for providing this information to anyone who comes to your home and asks
for it, regardless of the reason they claim they need it.
Ask for Proof
Tell the caller or visitor you’re going to contact the utility’s customer service department to
confirm his or her identity. Most importantly, if someone knocks on the door of your home,
do not let him or her in unless you scheduled a service appointment.
Beware of High Pressure Tactics
Utility companies generally do not use higher-pressure tactics like threatening to shut off
your service if you don’t pay your bill immediately. Many are often willing to work with
customers if they can pay some of their bill now and the rest according to a payment plan.
Material contained in this article is provided for information purposes only and is
not intended to be used in connection with the evaluation of any investments
offered by David Lerner Associates, Inc. (DLA). This material does not constitute
an offer or recommendation to buy or sell securities and should not be considering
in connection with the purchase or sale of securities.
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