David Lerner Associates: Watch Out for These Utility Scams

David Lerner Associates: Watch Out for These Utility Scams

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2013-10-01

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 one of the scams, 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 supposedly 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. 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.

Identity theft experts offer the following suggestions to help protect yourself from these and some other types of fraud:

  • 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.
  • Never provide personal identifying information over the phone if you did not initiate the call.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 some kind of proof that the person contacting you actually works for the utility company he or she claims to.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. 
  • Be suspicious if the person uses high-pressure tactics to try to get you to pay your bill immediately.Again, 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. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities. Member FINRA & SIPC.

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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates 1 877 367 5960 http://www.davidlerner.com

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