Old scam makes comeback when utility rates soar
Con artists are bilking some homeowners out of their money — and even their personal identities — by offering a bogus plan that promises federal help to pay the victims’ utility bills.
Q. I received a call last week from a woman who said she works for the gas company. She said the federal government is offering all homeowners an automatic $1,200 payment to cover their energy bills, but that the deadline to file an application for the money is April 15. Is there really such a program?
A. No, there is no such federal utility payment plan available. I wrote about a similar scam about three years ago, but it’s making a comeback because winter was unusually brutal in many parts of the country, and spring has gotten off to a chilly start.
According to officials at the Better Business Bureau, the con artists call, send an email or sometimes even show up on a homeowner’s doorstep to make their fraudulent sales pitch.
Often, folks who fall for the hoax are given phony bank-account and routing numbers to use to pay their bills online with a promise that the federal money will soon follow. The catch: They must first “register” their Social Security numbers and other personal information with the scamster. Others are told to simply use their Social Security number or their credit card as their online account number.
Either way, homeowners are led to believe that their bills have been paid after they have supplied the information, and that the reimbursement has been processed. Instead, all they get is a stolen identity, late fees for the unpaid bills and sometimes even an interruption in their utility service.
There are several ways to avoid this and similar types of scams.
First and foremost, the BBB says to never provide your Social Security number, credit-card information and the like over the phone, online or at your home unless you initiated the contact yourself and are confident with whom you are speaking.
Be skeptical if you receive a telephone call from someone who claims to represent your utility company (or any other institution you deal with) and then pressures you to provide personal information or to make an immediate payment. Instead, hang up the phone and call the company’s customer-service number, which appears on your official monthly statement.
Never allow anyone into your home to check electrical wiring, gas leaks or the like unless you have scheduled an appointment or have reported a problem. Also, ask utility employees for proper identification before opening the door.
Immediately contact your bank and the company that you thought you had paid if you think you may have fallen victim to a scam. Notify law-enforcement authorities, too, and file an online complaint with the Federal Trade Commission at www.
ftc.gov. Also contact the three national credit bureaus — Equifax, TransUnion and Experian — and have a note placed in your file to limit potential damage to your credit score.
REAL ESTATE TRIVIA Automobile owners filed the most complaints with consumer-protection agencies in 2015, the Consumer Federation of America reports, followed by homeowners who were upset with their contractors or repairmen. Complaints against all types of utilities were third.
Q. I recently researched my ancestry and found that one of my greatgrandmothers in England had something called a “widow’s quarantine” for her home. What does that mean?
A. A widow’s quarantine was a part of Old English Law, established by the 1215 Magna Carta — the very document upon which our own U.S. Constitution was based about 550 years later.
A widow’s quarantine didn’t have anything to do with infectious diseases. Instead, it allowed a woman who had lost her husband to remain in the family home for 40 days without paying rent.
The quarantine allowed a chance for the widow to grieve and to hold off relatives or others who wanted the house, the fields and anything else the couple might have owned.
Q. I purchased my first rental property last summer but wound up losing about $3,500 for the year because my first tenant bailed out while still owing $1,000 in back rent, and it took me another $2,500 or so to get the place back in shape. Can I deduct the loss on my upcoming federal tax return?
A. It depends. In most cases, the IRS’ “passive loss rules” prohibit the deduction of rental real estate losses, but there are two major exceptions.
The first is if you “actively participate” in the management of the rental. Good examples of active management may include interviewing and approving new tenants yourself, handling needed repairs, collecting the rent checks or (sometimes) simply choosing a management company or contractor to do these chores for you.
If you qualify for this exemption, you can deduct up to $25,000 of rental losses from your income. The tax break, though, gradually phases out for taxpayers whose adjusted gross income tops $100,000 and disappears entirely for those whose AGI exceeds $150,000.
The second exception applies to real estate professionals who spend more than 50 percent of their working hours and more than 750 hours each year in the realty business as brokers, developers, apartment managers or the like; they can deduct their losses without limitation.
Here’s the catch: The IRS has been cracking down on taxpayers who claim this exemption by asserting that they’re in the real estate business, especially if their W-2 forms or related documents show lots of income that came from non-real-estate activities or investments.
Consult an accountant or similar tax professional for help. You can also get a free copy of IRS Publication 925, Passive Activity and At-Risk Rules, by calling the agency at 800-829-3676 or by downloading it from www.irs.gov.
Send questions to David Myers, P.O. Box 4405, Culver City, CA 90231-2960, and we’ll try to respond in a future column.
The Better Business Bureau says to never provide your Social Security number, creditcard information and the like over the phone, online or at your home unless you initiated the contact yourself and are con dent with whom you are speaking.”