Identify and Protect Yourself From Renewable Energy Frauds

Scammers know precisely where to hit you. They won’t offer you ludicrous deals involving swamplands in Texas or ski resorts in Florida. Instead, they’ll grab your attention with bargains that look legit and target your pain points.   

With the scary specter of climate change looming on the horizon, issues about green energy are likely to capture your interest. That’s why the alternative energy sector is drawing in a growing number of fraudsters who will bait you with enticing promises related to green energy. The tempting offers usually revolve around investing in companies associated with anything green.   

That includes alternative energy sources (like solar and wind power), electric car manufacturing, and the like. 

Hopefully, this article will help you avoid falling for green energy scams that rob you of your hard-earned money.  

Common Green Energy Scams

Cons associated with green energy are on the rise. Fraudsters across the country typically create fake companies to attract investors who believe they’re putting their money on renewable electric sources. They create hypes that can make a worthless stock appealing to possible victims looking for a future cash windfall.

Here are some common ways they use to entice you to invest in a renewable energy company.  

Slamming

One of the most common alternative energy scams is slamming. This fraudulent practice occurs when a sales rep switches you to their electric company without your consent. 

How does the salesperson enroll you into their service without your approval? Well, sales reps usually knock at your door or call you to pitch their products to convince you to change energy suppliers. Even if you refuse, they might make the switch anyway.  

They’ll need your account number to perform this scam, so be wary when someone asks for your bill. Take note that some sales reps may claim to be from your utility provider or the government to make you fall for this trap.

Discounted Rate Scam

Rising electricity prices make it easier for fraudsters to perform the discounted rate scam. After all, who doesn’t want lower utility bills, right? In this type of fraud, you’ll be contacted either personally or through the phone by a company claiming to be a third-party supplier. They will lure you with lower rates, asking you to sign a long-term agreement or contract comes next. But when you’ve made the switch to the new company, the rates on the energy plan you chose will rise.

Terminating the agreement is the logical choice. However, you’ll need to pay high cancellation fees to do so.  

Although third-party providers are legal in many states, read the complete details of the contract, including the fine print, so you’ll know exactly what you’ll be getting into.  

Unpaid Bill Scam

Even if you’re meticulous when it comes to paying your utilities, there will likely be times when you can’t remember if you’ve managed to settle them all. This makes the unpaid bill scam a favorite among fraudsters.   

You’ll typically get a call from someone claiming to be from your energy provider informing you about an overdue bill. Unless you pay the amount immediately, your service will be shut off, or so the caller claims. You may even be instructed to call an 800 number and directed to pay your overdue amount in cash or prepaid debit card.  

Fraudsters know how inconvenient it is to be without electricity, especially if you can’t provide emergency power for your needs. This makes the unpaid bill scam one of the most popular among the green energy scams.

Repair/Inspection Scam

Sometimes actual utility personnel from your electric company need to check or repair some equipment in your home. Take the electric meter, for example. Basing their modus operandi on this scenario, utility scammers will inform you that your power meter (or some other equipment) needs repair or upgrading.  

They will then demand upfront payment for the so-called necessary service and threaten to turn off your electricity if you refuse.  

Renewable Energy Scams: Who Are Their Targets?

Fraudsters are always on the lookout for individuals they can target for potential scams. Owning a private jet or a luxurious mansion is not their primary criterion. Instead, they search for specific traits that indicate a possible vulnerability. Unfortunately, scammers are quite the experts in spotting people who belong to the more vulnerable segment of the population.  

When it comes to energy scams, these are the common targets of scammers.  

Investors

Investors are those who are looking for ways to put their extra cash into good use. That makes them excellent scam targets. According to the Federal Trade Commission (FTC), Americans have lost more money on investment scams than from other types of income fraud. The average loss is around $16,000.

Older people, usually in their 50s and 60s, are the more common victims. That’s because they usually have more accumulated wealth and money than younger people. They lose more, too, with a typical loss amounting to $24,000.

By promising big payouts, quick money, and guaranteed returns, swindlers manage to convince investors to put down their hard-earned cash into dubious schemes. 

Consumers

We mentioned at the start that scammers excel at detecting your pain points. When it comes to electricity, they know that many consumers will grab the opportunity to lower their utility bills. That makes them perfect targets for green energy scams. 

Racketeers will employ various techniques, ranging from offering huge discounts on power rates to intimidation tactics to defraud their victims. Sometimes, they will even claim to own some patented technology that can lead to a cash windfall from purchasing stocks.

How to Recognize a Scam?

Energy scams can happen to anyone. Fraudsters have become so adept at tricking their potential victims that you should be on your guard lest you fall prey to their shenanigans.

Know the warning signs so you can avoid being a victim.

• Unable to provide credentials: Legitimate utility personnel will have some proof of their connection with the company. The maintenance crew will usually be in uniform, sales reps will have IDs, and they will readily let you inspect their credentials upon request. If they invent some excuse about not showing proper documents, take that as a red flag.  

• Make a payment request without prior warning: Utility providers will usually notify you about any changes or issues related to your account. Also, in most cases, you’re given a specified period to pay whatever charges you incurred. In contrast, scammers will require you to settle the charges post haste. Legitimate companies also don’t request you to pay through a prepaid debit card.

• Requests a record of your account number: Bonafide companies make an effort to protect their customers’ information. They don’t usually ask for sensitive details like social security numbers that could compromise your account’s security. Some of them even redact or conceal certain digits of your account number in their communication.  

• Requests an immediate switch in services for a discount: Scammers will urge you to act immediately so you can qualify for a discount, government rebates, or tax credits. Authorized energy company reps will give you enough time to review the details of their offer before you sign a contract or enroll in an energy plan.  

How to Avoid Being Scammed?

If you want to reduce your carbon footprint by getting a green scheme, make sure you’re dealing with a legit company. Also, be vigilant, so you don’t get lured into a shady deal. Observing the following tips can help you lessen the chances of becoming a victim of scammers.

• Don’t reveal sensitive or personal information: This information includes social security numbers, banking information, energy bills, or account numbers. Fraudsters can easily use those sensitive details for their scamming activities. Take note of how your utility provider communicates with you so you’ll be able to detect a potential scam.  

• Hang up on a call that was not solicited: You’ll never know what sensitive information a simple phone conversation can reveal to the caller. So when someone phones you claiming to be a representative of your utility provider, hang up and contact your energy company to verify. Never divulge personal information without checking on the legitimacy of the transaction.  

• Regularly monitor your account status: By regularly checking your account status, you’re updated regarding any changes the energy company makes. You’re also less likely to get pressured by intimidation techniques if you know that you’re up to date with your payments. 

• Double-check any information or offer before sending funds: Review and verify with your electricity provider all the details of the agreement before you sign the contract or pay for anything. Moreover, never send payment through a prepaid debit card.

• Request identification and employment proof: Legitimate personnel will be able to show you proof that they’re connected with the company they represent. Moreover, they’ll let you check out their credentials without hesitation.  

• Keep up with currently reported scams: Forewarned is forearmed. If you know the common scams in your area,  you’ll be on the alert and will be able to detect if you’re the target of scammers.

FAQs

Conclusion

Scammers have gotten more sophisticated in their methods. Thus, you need to keep informed to better protect yourself from scamming attempts. Know that many fraudsters are using green energy as bait since many power consumers have concerns about the environment. So be on your guard and make sure you deal only with legitimate electricity providers and their personnel.

If you become a victim, report the crime. By doing so, you’ll help others avoid becoming the next prey for scammers.

Updated on 04-13-22