Utilities band together against scammers
July 5, 2017

More than 100 electric, gas, and water utilities are joining forces to protect their customers against con artists.

In the last six months, Utilities United Against Scams successfully worked to disconnect more than four dozen 1-800 numbers tracked to swindlers, shared incidents reports with law enforcement, and created materials for utilities to use on social media.

It is free for utilities to join the growing organization, which formed last year and fights those who pose as utility representatives and threaten service shutdowns unless “overdue” bills are paid. The scammers’ tactics are increasingly sophisticated. Some go door-to-door claiming the area’s water quality is poor and then gain access to the home, possibly to case it for a future burglary.

“The main reason for the coalition is for utilities to pool their efforts to magnify their reach to the public,” said Jared Lawrence, UUAS founder. 

The coalition can be reached through Lawrence's email address at Jared.Lawrence@duke-energy.com.

Nov. 15 Awareness Day

Last year, the U.S. House of Representatives adopted a resolution designating the third Wednesday of November as “Utility Scam Awareness Day.” The day falls on Nov. 15 this year and will be part of a week-long advocacy campaign.

The coalition first formed in the electric sector, but now includes such water organizations as Fort Worth Water Department, Middlesex Water Company in New Jersey, Portland Water Bureau in Oregon, California Water Service, Los Angeles Department of Water & Power, El Paso Water, and the National Association of Water Companies, which includes 130 private utility members.

Marybeth Leongini, NAWC’s director of communications, said that while NAWC’s members regularly communicate with customers about scams, the collaborative helps utilities share data and best practices. Members convene during monthly conference calls.

“Water utilities, both public and private, are underrepresented in the collaborative and we are excited to work with UUAS....and water utility associations to recruit more water utilities to join,” Leongini said.

NAWC utilities have seen an uptick in scam reports, Leongini said. “But while the UUAS members on the electric/gas side are experiencing imposters targeting customers by telephone and demanding payment using a prepaid card to avoid service disruption, water utilities are seeing imposters attempt to gain entry to homes claiming they need to check the meter or inside pipes with the intent to rob the home.”

Centralized data base

More than 25 million Americans have been victimized by consumer fraud, but no centralized database exists for fraud committed against utility customers.

UUAS aims to change that. The collaborative's database team is collecting incident reports from UUAS member utilities so the coalition can quantify the problem and detect fraud patterns. But until the database is further developed, the scope of the problem remains primarily anecdotal and tracked within individual utilities.

Lawrence is vice president of revenue services at Duke Energy, an electric power holding company that serves about 25 million people in six states. He said Duke’s customers have reported losing roughly $1 million since the company began tracking scam reports in June 2015.

Lawrence’s preliminary data from a handful of UUAS members shows approximately 6 to 10 percent of scam targets fall for the ploys. 

Christina Montoya, communications and marketing manager for El Paso Water, said her utility experienced a “large rash” of scam reports in 2014 and 2015. 

“Customers were getting phone calls instructing them to provide credit card information over the phone for past due water bills or their services would be terminated,” said Montoya, a member of AWWA’s Public Affairs Council. “We reminded the public they should not provide financial information unless they initiate contact with us.”

The utility continues to field sporadic reports of fraudulent activity, Montoya said.

El Paso Water joined the coalition after Montoya researched how other utilities were handling scams. She downloaded some of UUAS’s public outreach materials.

“All water providers should take advantage of the free materials this coalition has put together,” Montoya said. “Even if your utility hasn’t received (fraud) complaints, it doesn’t mean it’s not happening to your customers.”

Mary Gugliuzza, media relations and communications coordinator for Fort “Worth Water Department, said her utility periodically hears from customers who say someone claiming to be a department employee tried to get into their home to test their water.

“We don’t have anybody do that,” said Gugliuzza, a Public Affairs Council member. “We assume they are trying to case the house to see if they want to come back later."

Such incidents sometimes involve two scammers, said Bernadette Sohler, vice president of corporate affairs at the Middlesex Water Company in Iselin, N.J.  “One is at the tap, while the other one says, ‘I have to go check the piping.’”

Fairfax Water in Virginia has received about 12 suspected fraud reports this year, said Jesse Aranda, the utility’s public information officer. While that number may seem small, “the reality of even one case makes us uncomfortable due to the long-lasting and often irreversible effects of these scams.”

Expanding the reach

UUAS is working with several organizations to raise awareness, including the Better Business Bureau and AARP.

Other efforts involve the telecom industry, which is fighting robocalls and caller ID spoofing. Lawrence said UUAS also works with Somos, which manages more than 40 million toll-free numbers, to shut down scam numbers.

Lawrence first got the idea to create UUAS back in the spring of 2015, just after well-publicized security breaches at several large companies.

“Our customer care reps were seeing a lot more scam reports,” Lawrence said. “Customers thought scammers had their actual data. They said, ‘The scammer seemed to know our power bill amount.’”

Lawrence ordered an audit of all Duke accounts reporting scam activity. “We found there was not a single breach of Duke Energy’s data. So, we interviewed the customers and found that in every case, the scammer quoted an overdue balance that sounded reasonable given the customer's type of business – some were close, but not exact – or the customer was unknowingly tricked into telling the scammer the amount. The scammers are sophisticated social engineers in that respect.”

Even though Duke’s account systems had not been breached, Lawrence decided to start UUAS. “Even though we had no vulnerabilities, we didn’t want to leave our customers on their own.”

The coalition continues to pick up steam, growing from 40 members to 105 in the past few months. Some of UUAS’s members met in May during the CS Week conference in Fort Worth to discuss formalizing its leadership structure. CS Week is an annual educational and customer service conference serving electric, gas, and water professionals across North America. 

Kathy Koch, customer services director at Portland Water Bureau, said her utility joined UUAS to stay informed about industry-wide, anti-scam efforts.

“People work hard and try to do the right thing and it just kills me to hear when a customer is taken advantage of by using our name and threatening their water service,” Koch said. “I want to make sure we are doing everything we can to protect our customers.”

 For more on UUAS, including membership information, contact Lawrence at his email address at Jared.Lawrence@duke-energy.com.

Do you have a comment or story idea for Connections? Please contact Ann Espinola at aespinola@awwa.org or at 303-734-3454.