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Common energy scams to be aware of

By Tiffany Reynolds

Finding the right energy plan can be challenging. There are numerous electricity providers in Texas’s deregulated energy market, each of which offers several plans. The choice can be overwhelming, especially when comparing all of your options yourself.

With Power Wizard, you don’t have to do it alone. We’ll do the hard work of comparing plans and select the best one for you based on your energy needs. It only takes a few minutes, and you’ll feel confident you’re never overpaying for electricity.

Unfortunately, while there are plenty of fantastic electricity providers in Texas, there are also people out there looking to take advantage of unsuspecting consumers. Many are after your money, and others seek to steal your identity. By making yourself aware of common energy scams, you can take measures to protect yourself.

What are energy scams?

Energy scams come in many forms — unusual phone calls, door-to-door “salespeople,” fake emails, etc. Someone claims to be from an energy company, often yours, but sometimes a competitor. However, rather than helping you, they trick or badger you into providing personal information or payment.

The following are a few of the major energy scams out there:

Solar energy scams

Solar is an increasingly popular solution for residential energy customers looking to reduce their environmental impact and save money. Unfortunately, this has also led to an uptick in solar or green energy scams.

These scams take advantage of a homeowner’s desire to be more eco-friendly. However, rather than help you understand solar’s benefits, your options, and any financing/incentives you’re eligible for, scammers are light on the details. Instead, they often use high-pressure sales tactics to encourage you to sign a contract you don’t fully understand. They may also discourage research by claiming their product is the only one available in your area.

Other tactics solar energy scammers might use include:

  • Posing as a representative from a government or local utility company,
  • offering to get started without a contract, or
  • starting the installation process but disappearing with your money before they finish.

Door-to-door energy scams

In Texas, with its deregulated energy market, energy companies can send representatives door-to-door to inform homeowners of their options. While completely legitimate, scammers sometimes pose as salespeople from local electricity providers, but they have ulterior motives.

Door-to-door scam artists use a few different methods:

  • Offering a “special” discounted energy rate, but only if you sign up on the spot,
  • saying there’s a problem with your account, and they need to see your most recent energy bill to fix it (which may result in slamming or switching you to a different provider without your consent), or
  • if there’s a power outage, offering express service restoration for a fee.

Telling the difference between a legitimate salesperson and a scammer can be difficult. Scam artists, however, tend to provide fuzzy details about their plans or contracts. They may also use high-pressure tactics to force you into signing a contract or handing over money without giving you a chance to do any research first.

Prepaid debit card scams

Whether they’re operating over the phone or going door-to-door, many scam artists requesting — or demanding — money will ask for unusual payment options, often a prepaid debit card. A scammer asks you to load money onto a prepaid card and then provide them with that card’s number so they can access the funds.

One of the reasons energy scammers request prepaid debit cards is they’re much harder to trace. Some may also ask you to pay using:

  • gift cards,
  • wire transfers,
  • money orders,
  • a check made out to a person rather than the energy company, or
  • cash (often with the promise of a special rate or other incentives).

Energy bill scams

Energy bill scams can be frightening. A scammer claiming to represent your energy company contacts you via phone or comes to your door and tells you have overdue power bills. Worse, they say they will shut off your electric service if you don’t pay immediately. They’re hazy on the details and may become more threatening if you ask questions or don’t comply. They’ll also typically ask for prepaid debit or gift cards rather than telling you to pay as you usually would.

Scams through authentic-looking email

Another way scammers attempt to get your information is through phishing emails. They send what looks to be a legitimate email from your energy provider. It could imitate a bill or a late payment notice. It may also include a link to a seemingly legitimate website featuring boxes for you to provide your personal/payment information. In other words, these emails are a crafty way for scammers to steal your credit card number, bank account information, and even your social security number.

How you can avoid any type of scam

One way to avoid energy scams is to familiarize yourself with your energy plan. Knowing details like your provider’s name, plan type, contract length, and what you pay for can help you detect something fishy.

Another thing you can do is know the signs of an energy scam. Despite a scammer’s ability to appear legitimate, there are some red flags to be aware of:

  • They try to push you into choosing a new provider or plan.
  • They don’t provide much detailed information about their plans.
  • They threaten you.
  • They ask for unusual forms of payment.

When it comes to email phishing scams, the sender’s address often has typos or looks strange. The body of the email may be vague but urges you to click a link to pay or update account details.

Here are a few other ways to protect yourself from an energy scam:

1. Never give confidential information over the phone

Scammers often spoof phone numbers when they call potential victims. To your caller ID, it looks like your energy company’s number. However, the caller then tries to get personal information from you.

Social security number

Some scammers already have some information about you when they call. In addition to your phone number, they might have your home address and birthdate. Getting your social security number would allow them to commit identity theft.

Bank routing number

Access to your bank routing number gives scammers access to your accounts. They could then set up bill payments for services you aren’t using or transfer your money out, and you might not notice anything until you see your bank statements.

Never give anyone confidential information over the phone. Instead, tell the caller that you’ll call back. If you aren’t sure of your account status, you can check it by signing on to your online account or reaching out to your energy provider directly. Don’t use the number in your caller ID, though. Instead, look up your company’s contact information online or find it on a recent billing statement.

2. Always ask for proper identification for those entering your home

Not all salespeople are out to commit fraud. Before letting anyone in your home, ask for their ID. Legitimate representatives will have proper identification and be more than happy to provide it. If you’re still unsure, contact the company they claim to represent for verification.

3. Report scam activity

Even if you don’t fall for suspicious calls, door-to-door sales, or email phishing scams, that doesn’t mean others won’t. Contact your energy company to let them know about the activity. You should also report the scam to the Federal Trade Commission (FTC) online or by calling them at 1-877-382-4357.

Don’t fall victim to energy bill scammers

Energy scams are an unfortunate reality, but that doesn’t mean there’s nothing you can do about them. Learning how to spot the warning signs of energy scams and immediately reporting them can help protect you and others from becoming victims.

You can also protect yourself by using a trusted partner to help you compare energy plan options. Power Wizard works for you, not the electric companies. It’s our mission to protect you from energy providers seeking to take advantage of you with gimmicky plans and hidden fees. As our top priority, you can rest easy knowing the plans we select for you are with your best interests in mind.

Ready to find a great energy plan? Visit Power Wizard today to get started!

 

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