How to Avoid the Nationwide Utility Bill Energy 'Credit' Scam

July 10, 2012— -- Utility companies in the Midwest are warning customers of an ongoing con that has already affected thousands on the West and East Coast in which a scammer claims households are eligible for an energy credit offered by President Obama to obtain personal information.

The Iowa Utility Association and three utility companies say a scam that falsely claims President Obama, who happens to be in Cedar Rapids on Tuesday, is providing energy credits by applying payments to utility companies with fake accounts provided by the scammers.

Scott Reigstad, a spokesman for Wisconsin Power and Light Company, an Alliant Energy company, said about 100 customers have been scammed since July 5.

"Nationally, the scams have been happening for months, some through social media, text messages, or fliers," he said.

Though many people wouldn't think of providing personal information to strangers on the phone, the scammer's pitch may be more persuasive than you think, especially if they already know the name of your utility company.

"These credits that supposedly the president has offered seem fairly attractive to some people," said Mark Douglas, president of the Iowa Utility Association. "Because they offer the chance to reduce a utility bill, people are very willing to release that personal information."

Victims' stories vary, but the goal of the scam is to extract enough personal information from you to initiate identity theft.

"We had people reporting they have received calls from people saying they were utility representatives and they needed banking information now or their power would shut off," said Douglas.

Most of the scammed Alliant customers were contacted by phone through voice recordings or a person and were provided a bank routing number to pay their utility companies. Some victims of the scam are instructed to provide their Social Security numbers in some instances, Reigstad said.

About 49 customers of MidAmerican Energy Company, Iowa's largest energy company, according to the firm, have tried to make payments with a non-working routing number used in the scam. Those customers were from cities including Des Moines, Waterloo, Iowa City, Davenport and Rock Island, Ill.

"Payments made using the routing number will not be applied to customers' bills," said Tina Potthoff, media relations manager with MidAmerican. "We are trying to reach out to customers to make sure no one else falls victim to this."

Starting in late June, customers began calling MidAmerican Energy Company to inquire about the non-existent government program.

"We've seen this at other utilities," Potthoff said. "The best possible way to put a stop to this is prevention and education."

The advice from MidAmerican and the other utility companies is to never provide personal information that the utility company should already have.

If you're suspicious of someone who calls you and claims to represent your utility company, "hang up on the caller and give us a call so they know we are on the other end of the line," Potthoff said.

"If you're ever in doubt, give us a phone call as soon as possible," she said.

It's unclear where the scam originated, though Potthoff said the utility companies are working with local law enforcement to try to get to the bottom of it.

San Diego Gas & Electric issued an alert to customers warning of the scam on May 15. Pennsylvania Electric Company, PECO, released a warning to customers on June 28. Florida Power & Light Company issued a release last week and said 30,000 customers had tried to use the credit when making a payment.