Avoid identity theft traps in the utility bill setup process

Today let’s talk about “Sarah.” You likely know someone like her.

A few years ago, Sarah finished school and started applying for jobs. She was a good student, and it wasn’t long before she found a promising position with a company she respected in Austin.

In short order, she bought a used car, moved into a rental apartment just north of the city, and started an exciting new phase of her adult life.

A call from the utility company

A few weeks into the hustle of starting the new job, Sarah was between meetings and training when her phone rang. The caller identified themselves as a representative from Austin Electric. They read back Sarah’s full name and phone number from their file and asked her to confirm her new home address. Knowing they were talking to the right Sarah, they let her know the bad news.

The representative from Austin Electric informed Sarah that she had not yet set up her electric utility service at her new place.

Further, the company had a technician in the area, and they were scheduled to turn off the service at her apartment since there was no active account for the address. To make matters worse, if her service was turned off, it would take several days to schedule a technician to return and turn her electricity back on.

But there was hope! All of this could be avoided, and the caller offered a lifeline. If Sarah could give her some information over the phone, they could set up a proper account together, and the service wouldn’t be cut off.

This was the first time Sarah had to set up utilities on her own, but she had made some headway in the process. Internet was already on and she’d signed up with the water company online. She’d asked her landlord about what other utilities she needed to set up but hadn’t gotten an answer back yet. This was just an oversight.

With an eye on her next meeting in 15 minutes, Sarah provided her name, social security number, bank routing information, and email address; and even opted in for paperless statements and automatic monthly payments. The representative thanked her, let her know her first bill would be emailed at the start of the next month, and wished her a good day.

What happened next was brutal.

Utility bills were the first step in a complex identity theft scheme

The next month, Sarah never saw an email for her electricity bill. But, when she looked at her bank statement, she saw an electronic transfer to something that looked like Austin Electric for $122.00. She thought that seemed high, but perhaps the bill was back-dated? She didn’t follow up, deciding to check on it the next month.

When the next month came, another payment came through, this time for $890. That put a serious dent in her budget. Even in the Texas heat, there was no way her electricity bill was that high.

She still hadn’t received a bill in her email, so she looked up the number for Austin’s electricity utility online and called the customer service number. That’s when she began to realize what had happened, the situation she was in, and the scam that had taken place.

Over the phone, the utility representative could not confirm Sarah’s account because while her name was in their system, the address, phone number, and email she provided didn’t match what the utility had on file. With only that information, Sarah couldn’t get any closer to the truth because even with her banking information, the utility company would not give her any information over the phone. She had to come into the office with her proof of ID, social security card, and proof that she lived at the address.

Thankfully, she had these, and she scheduled an afternoon off from work to drive to the utility office to get things sorted. With all of her documents in hand (and a long wait in line) she got to the ugly bottom of what had been going on.

Her name, bank information, and social security number with the utility were all correct. What wasn’t correct was that her bank info had been used to set up an account for three other locations in Austin, where her card was used to pay past-due bills, and was listed on file for recurring payments. The email, phone number, and primary residence were all fake.

To make matters worse, the utility company couldn’t provide information on the locations where she had paid bills—the utility company would handle the locations, while Sarah would have to file a police report and a fraud claim with her bank if she wanted to get her money back from the utility. She had a long road ahead.

In the midst of this, there was a little kindness. Before Sarah left the utility office, the representative let her know that Sarah may want to run a credit check before she contacted the bank.

Following that advice, Sarah discovered that not only was she paying the electric bill at three apartments she had never heard of, her credit report showed two new maxed-out credit cards that she had never seen.

What to know so you can avoid utility scams

Utility scams prey on unfamiliarity and authority and can be frighteningly effective for identity thieves. We’ve changed some of the names to protect people and companies, but Sarah’s story is true. She eventually recovered her lost funds and repaired her credit, but the process was lengthy and time consuming.

Sarah’s story gives us a few lessons we can take to avoid identity theft when we’re setting up a new home. Along with those, you can also learn from the common tactics thieves might use when falsely claiming to represent a utility company.

1. Never give out your personal information when someone calls you

This is a good rule of thumb any time you answer the phone—especially if the number is blocked or unidentified, or if something just doesn’t feel right. If someone calls you and makes a threat, do not confirm anything they say, and don’t give them any new information. If you suspect it’s a legitimate call, ask for that person’s extension, then look up the business’ number online and call them back.

2. Be skeptical of threats–like shutting off power

Utility companies will do everything they can to avoid cutting off your service. Even if your legitimate bill is past due, they will send several warnings, attempt to contact you in multiple ways, and offer to work out a plan before they take action. If someone calls you and tells you that service will be cut unless you pay immediately over the phone, it’s likely a scam. Additionally, don’t fall for the same trick with someone in person.

3. Never pay a stranger at your door

Utility companies don’t send representatives to your home trying to collect money. If someone knocks at your door telling you to give them money for a utility, you should probably shut the door. Call the utility company to confirm the status of your account, and confirm there’s someone at your home telling you to pay. If they’re angry or threatening, or it just seems wrong, call the police.

4. Never pay when a service asks for an untraceable payment

If someone asks you for cash, payment in gift cards, or cryptocurrency transfer, you should always be wary. None of those payments can be easily traced or gotten back once the money is gone and, as happened with Sarah, require you to file reports and track down the issues. Use common methods of transfer to pay your utilities, and if you must use cash, be sure it’s at the utility office and you get your receipt.

5. Set up credit monitoring to catch issues early

Whether it’s a utility scam, phishing, or any other kind of identity theft, the end goal for most scammers is to gain access to your credit cards or get enough information to open accounts in your name. Credit monitoring helps to identify suspicious charges and new accounts so that you can stop thieves from taking action.

For as long as there is uncertainty about utility setups, identity thieves will continue to see this style of scam as a great opportunity to steal from us.

Protecting your personal and financial information is paramount. Remember that scammers continually evolve their tactics in a digital world. Being cautious and following sensible practices will always help keep you a step ahead. Don't let excitement or urgency cloud your judgment. Utility setup is just as crucial as any other aspect of moving to a new place. Learning from Sarah’s story, you can do it safely and with confidence.

Discover more about how you can get help protecting your identity with LifeLock.