A utility rep threatening to shut off service unless you pay a “past-due bill” by wire transfer, gift card, or crypto? Or offering discounts or freebies if you pay early? These are classic signs of a utility scam. If you suspect a utility scam, call your utility company directly using the contact information on an official billing statement or your online portal.
Light, water, and electricity are necessities for everyday life that we can access with the flick of a switch or the twist of a tap.
Unfortunately, it's just as easy for shady characters to exploit these conveniences by pretending to be legitimate utility service representatives.
These so-called utility scams have been around for years; in fact, the Federal Trade Commission (FTC) issued a warning in 2021. However, in the past six months, states like Florida, Texas, and Ohio have noted a rise for this scam type.
Whether you live in a sunny city or snowy suburb, if you pay a utility bill, you might be targeted.
Find out how to spot fake utility outreach before it's too late to get your money back — or before you give away personal information that could lead to identity theft.
How utility scams happen
Picture this: you're going about your day when suddenly the phone rings. On the other end, a voice claiming to be a utility representative informs you that there’s a problem with your account or service.
The only solution they offer? Send them money by wire transfer right away or your service will be disconnected.
If this sounds familiar, you might have encountered a utility scam. These schemes creep into the systems that we rely on for comfort and security, such as water, electricity, internet and cable, and more.
Our own Jordan Fisher, Restoration Specialist at Allstate Identity Protection, is familiar with this type of scam. “The problem becomes much more difficult to resolve if you willingly provide your account information to a fraudster, as the bank can then deny that claim for reimbursement,” says Fisher. “This holds true whether the scam was related to utilities, or a shopping account like Amazon."
Like many fraud schemes, utility scams are perpetrated through phone calls, texts, door-to-door visits, or even fake mail. But no matter what form of communication is used, the play-by-play usually goes like this:
Someone reaches out unexpectedly, claiming to be a rep from your gas, water, or power company — or worse: they pretend to be from a collection agency or other "law enforcement" agency to intimidate you. They threaten to shut down your services unless you pay a “past-due bill” immediately and request payment via wire transfer, gift card, or cryptocurrency because they know that these funds are more difficult to recover. Alternatively, a utility scammer might offer to lower the amount due if payment is made today or help sign up for (nonexistent) government programs that reduce your bills.
Your money or personal information is then stolen. The imposter will either convince you to make a payment to them and steal your money outright, or they'll claim to have tried running your debit or credit card, but it failed. After that, they ask for the routing and account number for your checking or savings bank account.
More damage is done. Once a fraudster has access to personal information, such as your banking details, they may be able to hack in and make changes to your accounts. This includes adding additional account holders or changing your login credentials to lock you out of the account altogether, so they can further exploit your finances.
Utility scams vs. utility fraud
Jordan Fisher, Restoration Specialist at Allstate Identity Protection, has managed cases where utility accounts are opened in someone else’s name. This is considered utility fraud, when someone fraudulently orders water, gas, cable, or other services using a stolen name or identity.
In contrast to utility scams, where scammers pretend to be from utility companies and attempt to collect money for nonexistent services. Despite their differences, both scams and fraud have one thing in common: they can cause significant financial harm.
3 steps to combat utility scams
“The best way to avoid utility scams is to ignore any unsolicited outreach,” says Fisher.
According to the FTC, legitimate utility companies do not demand personal information via email or phone. What's more, most states require utility companies to give advance notice before disconnecting services, and they must make multiple attempts to contact you.
It can be difficult, however, to unravel a scammer's manipulation techniques head-on. When faced with a potential utility scam, remember this:
Stay calm and cautious. Any time you receive an unsolicited request, our advice is to exercise extreme caution. Do not click on links in random emails or text messages (they could lead to fake websites designed to capture your information), especially those that contain grammatical or spelling errors. Even if someone shows up in person, shut the door if they do not have identification, are trying to collect payment, or are aggressively selling anything.
Don't share your personal information. “At the end of the day, the best practice is to never, under any circumstances, provide your financial account information to anyone other than known places of business,” says Fisher.
Verify their identity. Ask for their name, department, and a callback number. Then, independently verify their identity by calling the utility company directly using a number from their official website, online portal, or past billing statement. If the information they provided doesn't match the company's records, report the potential scam.
Reporting utility scams
If you’ve been impacted by a utility scam, the first thing you should do is contact your utility provider to report the incident. If you see any suspicious transactions, contact your bank or credit card company as well to limit the damage.
“If caught quick enough, there’s a possibility that the funds can be recalled and returned by the bank,” says Fisher. “But typically, fraudsters will wire the money out immediately, which makes it nearly impossible to recall. Banks are usually not obligated to pay that money back per their terms and conditions.”
As an Allstate Identity Protection member though, we're by your side all the way.
If you're ever in doubt, give us a call before you share money or personal information. And, if a utility scam leads to identity theft, our trained and certified specialists are here to help.
