How a business lost $19K in a utility bill scam
Con artists are using new tricks to get you to pay up
If you’re a con artist desperately trying to convince a consumer that they’ve really won $1.5 million in a sweepstakes promotion, why not put a government “authority” on the line to confirm that it’s all true?
A man in his 70s in Washington state “heard” from Stacy Canan, who leads the Office for Older Americans at the Consumer Financial Protection Bureau in Washington, D.C.
Except it wasn’t Stacy Canan. But the man didn’t learn the truth until after he had wired some $50,000 upfront to cover taxes on the sweepstakes money that wasn’t real, either.
The con artists are going to great lengths to falsely use the names of big companies — such as Michigan utility company DTE Energy; big government agencies, such as the Internal Revenue Service; and now even real people’s names, such as Canan’s — that might be easily Googled to seem real.
It’s all part of the plan to make the pitch seem as legitimate as possible in order to persuade someone that it’s wise to wire money up front to collect on a sweepstakes prize.
Or put cash on a GreenDot debit card to pay old heat or electric bills when a caller demands cash on the spot. And, sure, put money on an iTunes card to pay off the IRS.
Targeting small businesses
DTE Energy and other utilities are warning consumers this winter about a rash of bill-collecting impostors who are so sophisticated that somehow their bogus callback numbers even include recorded greetings and prompts that sound like DTE’s real customer service line.
The energy bill scam often focuses on businesses in a given area on a given day — local restaurants, auto repair shops, hair salons and the like.
“They always use what I call an artificial deadline to pressure you,” said Mi- chael Lynch, director and chief security officer for DTE Energy in Detroit. “They’ll always say the truck is on the way to shut you off.”
Mary Plaza, 52, a manager for Down River Body Works in Allen Park, Mich., ended up taking $980 to a grocery store last July to buy GreenDot prepaid cards to pay the bill for the auto repair shop after some scammers convinced the owner that the gas would otherwise be turned off soon. The amount of the bill didn’t seem outrageous for the business, as some of its bills can be about $2,400 a month.
The storyline the scammer used involved something about DTE claiming that the account numbers for the business had changed, and some payments weren’t made.
The caller created a do-it-now-or-else sense of urgency.
“If you don’t pay it, we’re sending a truck to shut off the gas,” Plaza recalled the callers saying.
She bought GreenDot prepaid cards, scratched off the back to reveal a number on the back of the card and then read that number to the person on the phone. The money is gone when the scammers immediately transfer the cash to another account to access the money at an ATM or spend it online.
A $19,000 loss
Plaza isn’t the only victim to fall for this one, either.
A Farmington Hills, Mich., business lost $19,000 in January after scammers pretending to be from DTE called and threatened to shut off the power. Farmington Hills Police Department Assistant Chief Daniel Rodriguez said the money was put on 39 GreenDot cards after the threats were taken seriously. The investigation is ongoing.
Rodriguez said one of the biggest red flags should be any time a bill collector demands you put money on a GreenDot or other prepaid card. Legitimate companies aren’t doing that, he said.
In some cases, the maximum amount you can put on a prepaid card is $500. So a consumer or business could be asked to buy several prepaid debit cards to pay the back-due bills. Clerks at stores such as Rite Aid have warned consumers, too, by asking why they’re putting so much money on Green Dot MoneyPak cards or iTunes cards.
Alarm bells should ring anytime, too, when the caller on the other line says a crew is on the way to shut off service unless you pay up. DTE isn’t going to do that.
DTE said about 200 people were scammed last year by fake bill collectors pretending to be from the utility, and customers lost a total of about $120,000.
Scammers up their game
What consumers need to realize, of course, is that scammers are upping their game to sound more convincing.
Elderly consumers may be targeted, for example, because they could have a good deal of savings — money that could easily be wired to take care of “upfront taxes” on a sweepstakes prize.
Now, it appears, the scammers promising big sweepstakes cash want to trick you by claiming to be someone you’d likely trust.
“While it’s true that I lead the CFPB’s Office for Older Americans, I do not have access to lists or records of sweepstakes winners, nor do my colleagues,” Canan wrote recently in an online blog.
Early this year, she received a phone call from the man from Washington state. “He said, ‘Do you remember talking with me?’ ”
“I said, ‘Yes, I know I’m real. But unfortunately, the person you talked to was not me,’ ” she said.
“It was a very hard conversation to have with him,” Canan said.