When it comes to offers that promise to save you money on anything, the chance of being caught up in a scam greatly increases. Today we will focus on door-to-door energy sales and how to spot the difference between legitimate offers and absolute fraud.
If someone comes to your door who’s well-dressed, perfectly articulate, brandishing some type of official-looking badge and a clipboard, chances are your trust factor goes way up. After the salesperson indicates that they can save you money on your monthly energy costs, your interest grows even more.
Most likely you will ask yourself if you can trust this person or not. But in the back of your mind, if there’s even a remote chance that this salesperson is telling the truth, then you owe it to yourself to at least listen. But in the end, you have no idea if you can trust them or not.
If you’re a smart consumer with at least a little common sense, you will become increasingly suspicious if the scammer starts to ask for financial information. And as much as you trust what they are telling you, one wrong move and you could be out thousands of dollars. And that’s not to mention the amount of time you’ll have to spend unraveling everything.
Are door-to-door energy scams really an issue? Unfortunately, they are. There have been numerous occasions when consumers don’t even realize they’ve been scammed. And depending on their level of pride, some people refuse to report it due to absolute embarrassment.
But there’s no sense in ignoring the situation. There is a national problem with this type of scam and we’re here to try to prevent it from happening to you.
Just How Bad is the Problem?
In 2015, almost $1 million in refunds were issued in the state of New Jersey after it was revealed by the New Jersey State Public Service Commission that 1566 consumers filed complaints about predatory sales practices. In fact, not only were consumers scammed, in some cases their energy bills actually increased.
It isn’t clear how many of these complaints stemmed from door-to-door sales, but one can assume that there was a fair share of incidents.
The problem has become such a concern that AARP has begun to warn its members. And we bet you didn’t know that the third Wednesday of every November has been designated as Utilities United Against Scams Day.
What Led to This Particular Scam?
We can sum up the answer to that question in one word: deregulation.
What is deregulation? It simply means that consumers have a choice as to who they can buy power/energy from. Think about your own personal situation. Every month you receive a bill from your energy supplier. As far as you know, you don’t really have a choice regarding who provides the service for you. But that’s not necessarily the case.
In some states, consumers can actually choose who provides their energy service. After doing some research, consumers may realize that other energy providers may have the ability to offer better rates or green energy.
In other words, having a choice leads to greater competition which would, in theory, lead to lower prices. And while all of this sounds like great news, this is where door-to-door scammers come out of the woodwork.
As you’re reading this now, perhaps this is the very first time you’ve heard about deregulation in the energy business. And if a salesman suddenly appears on your doorstep, you would most likely be extremely interested in hearing what they had to say. After all, who doesn’t want to save money on their monthly bills?
What’s in it for the Scammer?
That’s a pretty simple question to answer. What is every scammer after?
For the most part, door-to-door energy sales is a commission-based job. A yearly salary can range anywhere from $50,000 to $200,000. With dollar figures like that being thrown around, it’s no surprise that unscrupulous characters are going door-to-door using shady business practices to gain your trust. But that trust could soon end with a horrible nightmare.
How Do You Spot and Avoid These Energy Scams? Here Are Seven Tips
First of all, it’s important to point out that not every door-to-door energy salesperson is a scammer. And if you’re like most people, you will probably close the door in their face after you tell them you’re not interested. But there are those occasions where the salesperson really is trying to help you. So it might be a good idea to listen.
So what are the best ways to help determine if they are trying to scam you or if they are one of the “good guys”? Here are seven helpful tips:
- Find out who they work for. Just looking at their badge is not enough. Ask for identification. And then ask for proof of employment, even if you must call the energy company yourself.
- Never give out your personal information. This should go without saying. You should absolutely safeguard your bank account info, social security number and debit/credit card numbers. Also, don’t show them a copy of your utility bill which would display your account number. If the salesperson asks for any of this info, that should be an immediate red flag.
- Know who your current energy providers are. Most of us know who we are already paying. And by doing so, you won’t have to dig out an old bill if the salesperson asks to see it.
- Understand what the “cooling off” period is in your state. If you do decide to switch services, most states allow you a certain number of days to change your mind and cancel the request without penalty. During this time period, you will have an opportunity to investigate and make sure the offer is legitimate. A good place to start is by checking the Better Business Bureau Scam Tracker to see if there were any reported scams in your area.
- Ask questions until you get all the answers you need. Put pressure on the salesperson by asking common sense questions such as what your new rate will be. How long will the new rate last? What happens if the energy provider goes out of business? Can you cancel at any time? Is there a penalty for cancellation? What happens at the end of the contract?
- Be aware of what’s going on in your area. How many times have you watched those investigative reports on your local news where scammers are put on the spot about their deceptive practices? Know what’s going in your area so that you can spot potential scams right away.
- Don’t be embarrassed to report it if it happens to you. Don’t let pride stop you from reporting that you were scammed. In the event you are, don’t hesitate in contacting the Better Business Bureau Scam Tracker and the Federal Trade Commission.
In the end, there’s no harm in listening to a salesperson. As mentioned above, there are ethical legitimate salespeople who are there to help. But at the same time, it is in your best interests to be aware of any potential scam. And if something just doesn’t seem right, that would be the ideal time to ask the salesperson to leave your home.