Swindlers Target Co-op Members!
June 19th, 2013
By Heather Vaughan/ Derrill Holly
Sanford, N.C., June 19, 2013-The nation’s electric cooperatives are reporting a rise in swindlers who are using energy-related ploys to get into the bank accounts of co-op members.
Co-ops are warning members about a rise in bill payment fraud scams. (Graphic By: Nevada Department of Business and Industry)
Fake home energy audits and scams related to Green Dot MoneyPak prepaid credit cards are becoming more common, according to officials at co-ops from Texas to Virginia.
One of the most recent cases involved a manager of a Frisco, Texas, restaurant, who received a telephone call during his lunch crush from an alleged representative of CoServ Electric Cooperative.
“The person was speaking in Spanish,” said John Urrego, the restaurant manager, who is originally from Colombia. “He said that I have to make a $500 payment to cancel the order to shut it down, and I said, ‘OK. What do I have to do?’”
After some negotiation, the unidentified collector agreed to accept $300 immediately and $200 the following week, if Urrego immediately obtained a prepaid credit card to cover the initial payment.
“We are kind of new in the business—that’s probably part of what contributed to the situation,” said Urrego. He later reconsidered the transaction and contacted the Corinth, Texas-based co-op, which told him that he had been the target of a scam.
Dan Mugg, CoServ area manager for Frisco, said members from across the co-op’s territory have reported similar suspicious activity. “Mr. Urrego is not the only one to be taken in by these scam artists,” he said.
Variations on the scam include calls claiming expiration of automatic bank drafts. Scammers seek personal financial information, which presumably could enable a thief to raid bank accounts, Mugg said.
Other frauds include what Mugg described as “Home Walk-Through” scam calls. A member is told he or she can save money on their utility bills if they schedule a walk-through energy audit of the home. Police say thieves often use this technique to get a layout of a home for a future burglary.
Then there’s the “Miami Vice” scam. Members receive calls originating in Miami telling them they have won $2,500 but need to pay $199 in processing fees to receive their prize.
“If they’re hitting us, they’re hitting you,” said Sgt. Brad Merritt, public information officer of the Frisco Police Department. “They’re not target-specific.”
Johnson City, Texas-based Pedernales Electric Cooperative recently warned consumer-members of the prepaid credit card scheme and detailed the co-op’s collection procedures in a bill advisory.
In Virginia, Fredericksburg-based Rappahannock Electric Cooperative has reported six such calls recently, and Shenandoah Valley Electric Cooperative has raised similar concerns about callers who threaten to disconnect power to consumers unless they pay a delinquent bill in a matter of hours.
Co-ops in Louisiana have also issued warnings to their consumer-members, while investor-owned utilities in Wisconsin and several other states have been targeted.
“These scammers will tell you that you are months behind on your utility bills and must pay at once,” said Sandy Chalmers of the Wisconsin Department of Agriculture, Trade and Consumer Protection. “If these scammers call you, do not engage them. Hang up immediately.”
Better Business Bureaus and state attorneys general have also sounded alarms, noting that such schemes become more common during periods when increased energy use from heating or cooling can offer higher payoffs.
“Criminals are using easily accessible prepaid debit cards to take victims’ money and avoid being traced,” said Indiana Attorney General Greg Zoeller. “This form of payment is just like giving cash—once you hand it over it’s gone.”
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