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Thousands fall victim to utility payment scam

MADISON, Wis. -- As much as President Obama wants your vote, he's not actually offering to pay your monthly bills.

But thousands of Americans were persuaded otherwise, falling victim to a scam that claims to be part of an Obama administration program to help pay utility bills in a scorching summer.

The scheme spread across the nation recently with help from victims who unwittingly shared it on social media sites before realizing they were conned out of information such as Social Security, credit card and checking account numbers.

"No one knows who is behind this," said Katherine Hutt, spokeswoman for the Council of Better Business Bureaus in Arlington, Va.

The scam was cleverly executed and comes when air conditioners are running around the clock to tame record-high temperatures.

Here's how it works: Victims typically receive an automated phone call informing them of the nonexistent utility program that will pay up to $1,000. There have been reports of the hoax spreading by text message, flyers and personal visits.

Victims are told that they have to provide their personal information. In exchange, they are given a bank routing number and checking account number to provide their utility company when making a payment.

The swindle works because the payments with the fake bank account number are initially accepted.

Only when the payments are processed hours or days later is the fake number caught and rejected.

But by then, victims have told friends about the offer, posted it online and turned over information that could allow con artists to dip into their bank accounts or steal their identity.

Taneisha Morris' sister was drawn into the hoax after a friend received a text promising federal assistance with her bills. The sister sent the information to Morris, an unemployed Detroit woman.

Morris provided her Social Security number and asked for $187 toward her TV bill and $800 toward what she owed DTE Energy, a Michigan utility.

"It was very disappointing," Morris said Thursday after learning of the scam. "They shouldn't do that to people. I just lost my job in February, so it's very hard for me to come up with extra money."

Reports of the hoax surfaced in the spring and spiked in May and early July. Utilities and Better Business Bureau offices issued warnings.

"We see a lot of door-to-door scams," Hutt said.

"It is somewhat unusual to see one that's so well tied-together," she continued. "There could be copycats ... It's probably more than one scammer."

The scam quickly grew as victims shared the word on social media, "thinking it was a legitimate federally sponsored program," Sheppard said. "And of course, that can become confusing because there are legitimate federally sponsored programs."

There have been numerous other reports:

  • Entergy Corp. said in May that about 2,000 of its customers had been affected, mainly in Louisiana but also in Texas.
  • About 1,500 Duke Energy customers in the Carolinas, and a few in its Midwestern states, were duped, company spokeswoman Paige Layne said.
  • Atmos Energy, one of the country's largest natural gas distributors, issued a warning in May to its 3.2 million customers in 12 states after about 300 customers in Mississippi reported being conned, company spokeswoman Jennifer Ryan said. The company sent out a second warning in July.

"It's gaining some ground," Ryan said of the ruse.

  • Between 90 and 100 bogus payments came into the billing program in early July for Alliant Energy Corp., which serves about 1 million people in southern Wisconsin, most of Iowa, and southern Minnesota, spokesman Scott Reigstad said.

The business bureau and others are warning people not to share personal information unless they have initiated the contact and are confident in other person.

"We try to make this as easy and quick to grasp for anyone," said Janet Hart with the BBB in the Carolinas. "Never give out your personal information to someone who calls you."


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