Fraudsters are always looking for new ways to take advantage of people and going after something everybody uses, like household utilities, can be lucrative for them. Today’s guest is Amy Livingston. Amy is a freelance writer who has written on personal finance and consumer issues for Money Crashers and Consumer Search. Her personal blog Eco Frugal Living focuses on ways to save money and live green at the same time.“An automatic red flag for many types of scams is any time they request an untraceable form of payment such as a gift card or wire transfer.” - Amy Livingston Click To Tweet
- [0:51] – Amy shares her background and how she found herself writing about avoiding scams.
- [2:20] – Amy describes a utility scam that she actually experienced and the red flags.
- [3:53] – Scammers who go door to door often pose as someone from the power company.
- [7:12] – If someone comes to your door, ask for verification that they are who they say they are.
- [8:49] – Another door to door utility scam could happen by “paying a commission” to have your power restored faster if it has gone out.
- [10:54] – Home security scams can happen door to door but also through the phone or email.
- [12:00] – A home security scam that happens is when a scammer poses as someone from your security company.
- [14:40] – People who are legitimately from your home security company will not ask for your code or password.
- [18:00] – Chris compares current utility scam slamming to the long distance scams of the past.
- [19:03] – The unpaid bill scam is another common one that takes advantage of the target’s sense of urgency.
- [20:29] – An automatic red flag is any time someone asks for an untraceable form of payment.
- [22:05] – You cannot always trust the number that comes up on your caller ID.
- [25:23] – Any time you get a call from a financial institution, hang up and call the company they claim to be from.
- [27:11] – Amy describes a federal aid scam that targets people who need assistance.
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Amy, thank you so much for coming on the Easy Prey Podcast today.
Thanks for having me.
Can you give us a little bit of background about who you are and what you do?
I'm a freelance writer. I've been a freelance writer since 2004 when I left my job in publishing. I've done work for a lot of different types of companies, but gradually I became more involved with, sort of, consumer issues—how to shop, how to spend your money wisely—and working for Money Crashers, who is one of my major clients now. I have done a lot of work on how to avoid scams of various types, just knowing what to look out for, and beating them to the punch.
Was there any particular thing that drew you just for writing about scams?
At first, it was just one of the many options of things I could write about, and I thought, “That's something I could write about.” But the more I became involved with it, the more I began to feel this visceral satisfaction of knowing that I was beating these scammers in some way, that I was going to help give people the tools they need to see them coming and be able to avoid them, because some are worse than others. I feel like, yeah, stick it to these guys.The more I became involved, the more I began to feel this visceral satisfaction of knowing I was beating these scammers. -Amy Livingston Click To Tweet
I am in total agreement with you. If we can keep people safe and stick it to the scammers, we're in a good place. Let's talk about some of the scams that target people at home.
All right. There are a few different ones. Usually, it involves people pretending that they're something they're not. This one actually happened to me. I had people come to my door and they said, “We're from the power company, and we want to make sure that you're not being double-billed. Could you go and get your bill and bring it out here and show it to us, because if there's this particular code at the top, it means that you're being double-billed, and we need to fix that.”
As it happened, this was shortly after I had done my article on common utility scams, so I knew that was not what they were going to do. What they were going to do was look at the bill, find the code on it—and not at the top but in the middle—that tells them what my address is, that gives you permission to switch me over to a different power provider. This is called slamming. Basically, they switch you over without your consent. I just said to them, “Well, thanks. I'll take a look at that,” and slam the door. I could hear them outside laughing like, “Oh, this idiot doesn't even know what we're asking.” I thought, “No, no. This idiot is onto you.”
So, that's an example. That's one of the scams where people come door to door, and in this case, they were posing as people from my local power company. But they never said they were from my power company, which is PSE&G. They do not give a name. Instead, they say, “We're from the power company,” which maybe is technically true. They've been hired by a power company that wants you to switch to using them as your supplier.
This is a thing you can do since deregulation. You have one company that delivers the power to you, but you can buy it from another supplier. That's sometimes a good idea because sometimes you can get a better rate that way. Sometimes you can do what I've actually done, which is to switch over to a company that uses renewable energy. I prefer to support those companies, so I've switched over for that reason.
But these people want to switch you over without telling you that they're even doing it. And because it just comes on your regular utility bill, there's just a little note at the bottom that says, “You're now purchasing your power from this company.” You probably won't even notice it. You may not even notice that you're paying a higher rate for it, but you will. So, it's a scam, a particularly insidious type of scam because you may never even know it's happened.So, it's a scam, a particularly insidious type of scam because you may never even know it's happened. -Amy Livingston Click To Tweet
The fact that someone's actually showing up at your door, to me, that's pretty brazen and bold. The scammers are willing to have their face seen as opposed to being in a faraway land.
They're rather clever about it because they say, “We're from the power company,” which is technically true. They never say they're from your power company because you could check on that.
You sort of have this tendency to assume that when somebody comes to your door and identifies themselves in a particular way, that they are who they say they are. If they say, “We're from the power company,” you think, “Oh, this is somebody from my local power provider. I should talk to them. This may be important. And, “Oh, they're telling me that there's something wrong with my bill. This sounds like something I should fix right away.”
Whereas if you received it, if you got a phone call, if you got an email, you might think, “Maybe I should just check. Maybe I should get out my bill and check this on my own.” It's harder to do that when you're face to face with somebody saying, “You need to deal with this right now.”
I suppose the guys that are going door to door are getting a commission or they're getting a sign-up bonus whenever they get someone switched over.
That would be my guess. I've never determined how it is that they pay these people. The ones who came to my door were just kids. It looked like they were maybe college kids on their summer break. I think maybe they're just hiring whoever they can get for cheap. They may be paying them for the number of people they get to switch. They may be paying them for the number of people they talk to, but they're probably not paying them a lot compared to what they hope to get from you.
If someone comes to your door, for the listeners, how are we supposed to determine if they are legitimately from someone that we're working with?
One thing you can do is if they say, “We're from the power company,” say, “Oh, which power company?” I actually have done this once. They said, “We're from the local power company.” You can get more specific with them. You can say, “Are you from PSE&G?” And then they have to answer yes or no. If they go further than that and they just say, “Yes, we're from PSE&G,” that's when you ask for ID.
If it's really somebody from PSE&G, they would probably just have said, “I'm from PSE&G” to start with. They will certainly have some form of ID that proves they're from the power company. It's got to be more than just a clipboard with a piece of letterhead that has the name at the top. They'll have some official ID. Then you can say, “OK, I'm willing to talk to you.”
If you're still not sure, you can say, “You know what? Give me a minute. I'm going to call PSE&G and make sure they really sent you to my door.” At that point, if they’re a scammer, they will quietly disappear, most likely, rather than wait for you to confirm that no, they didn't.
While you go make the phone call, they're off to the next house.
Yeah. Sometimes, I've been tempted to go follow them to the next house and say, “Don't listen to these people.” But I've never actually gone that far because sometimes they can get violent. I've heard of cases—although I've never experienced anything like this—where they actually pushed their way inside and physically threatened people. But most of the time, all they want is to get your signature or to get the information they need so they can get your money.
They're not looking to get into an altercation.
Not usually, no.
That's not to their advantage. What other scams are you seeing targeting consumers at home?
Another door-to-door one is if your power is being shut off, someone may come around knocking on your door saying, “Would you like to get on the list to have your power restored faster? All you have to do is sign this and we can get your power restored faster. Pay us some sort of commission up front.” Now, of course, that commission is not going to the power company.If you think about it, there’s no way that you could get your power restored before everyone else on your block. -Amy Livingston Click To Tweet
If you think about it, there’s no way that you could get your power restored before everyone else on your block. There's one line that's supplying everyone. They're hoping that you'll be thinking, “I just need to get my power back on. I can’t work on my computer. I'm afraid my food in my fridge is going to go bad. I'll do whatever it takes. I'll pay you whatever you want just to get it back sooner,” and they quietly take the money and disappear. They're taking advantage of the urgency of the situation.
This is like when there's a neighborhood power outage.
Yes, the power is out everywhere. They'll come and say, “Do you want to be the one to get it back first before everyone else?” That one's easy to tell. It's never legit because the power company restores your power for free as fast as they can. And unfortunately, there is no way to make it go faster.
I was thinking that would be the question I would ask. “By what mechanism are you going to turn on my power before you turn on the power to the rest of my neighbors?”
I've never experienced that one myself. If I do, I would probably want to ask them that just to see if they have something on their script to explain it.
“Well, we're gonna switch that circuit first.”
“We're going to use only these electrons.”
“And direct them down just that one wire.” Do you also see scams targeting home security and alarm systems?
Yes, that's one. Home security scams sometimes come door to door. They can also work by phone or email in the way that people are accustomed to seeing scams these days. Those are also common.
With the home security scams, for example, they may come to your door, they're trying to sell you a security system. Often, if you already have a security system—they see that you have one—sometimes they're just using normal sales techniques saying, “Would you like to switch to our company? It's better.” Maybe a little high-pressure sales saying, “You have to act now. This offer is only temporary.”
Sometimes what they do is, again, pose as someone they’re not. They say, “Oh, we're here from your security company, and we just need to make some upgrades to your system.” They get into the house and they actually do switch out the equipment. They say, “OK, sign here,” for them to say that you've received the new equipment. If you don't read that contract, what you are signing is switching yourself over to a completely different security system. You will then be paying a bill to them, but you have not canceled your service with your old security provider.
If you try to cancel your service with your old security provider, they're gonna say, “Well, give us back our equipment,” which you cannot do because the scammers just came in and took it away from you. Now you've got two contracts, and only one of them is actually in your home. It's quite possibly inferior to the one you had to start with.
And from what I've seen, for whatever reason, most home-security contracts are from, like, three years. They're not month to month. Often, not even 12 months, but they're multi-year contracts.
You're stuck with that, plus you probably will owe a fee for the equipment that you have lost because it was basically stolen from you. I do not know if security companies have ways of dealing with this. I've never worked with a security company personally, so I don't know what happens if you tell them, “I've been scammed. Someone came into my house and stole my security equipment.”
This is something that a security system doesn't do a good job of protecting you from is from the person that you let in, because they said they were from the security company. You can do the same thing you do with the power company, which is ask to see ID. “Show me that you're from my security company and prove to me that you are.”
You can also do the other thing of calling your security company and saying, “Did you send someone to my door to upgrade my equipment?” If they didn't, they will tell you, “No, we didn’t,” and then you don't let those people in.
I'd also be worried about someone doing the same thing. “Hey, we're here to upgrade your equipment. Tell us what your security code is so that we can access the system.” And now they poke around, then all the beeps and boops, and you think they've done something. You've just given them your security code and when you're not home, they can now get in and disable your alarm.
That's an interesting one. I have not heard of cases of them doing that specifically, but it would probably not be difficult to do if they had some sort of uniform to make them look like they're from your security company, make them look like it from a security company. You assume if they say that it's yours, that it’s yours.
However, the one thing that would tip you off in that case is that they're asking for your code, which, if they were from the real security company, they would have. That's the whole point. That if someone comes in without the code, they know they came in without the code and they can show up or send the police. Your real security company knows your security code; doesn't have to ask for it.
And I think the security company actually has their own code to get into your security. You have your own password, but they also have their own password.
They also have an override.
It's like if your bank ever asks you for your PIN code.
I received an email just the other day. There must be a surge in scams right now because just in the past week or so, I've received three emails about them. One from my bank, one was from my financial advisor, and one was from the Social Security Administration. All basically saying, “People are going to come asking you for your information. That's not us. Don't give it to them.”But people have this impulse that if somebody says they're official, they're in a position of authority, you want to comply. -Amy Livingston Click To Tweet
But people have this impulse that if somebody says they're official, they're in a position of authority, you want to comply. Most people act instinctively and don't necessarily take that step back to think, “Is this person who they say they are?” You're used to people being who they say they are, as most people are, fortunately.
I think we're wired in a sense to trust authority. When someone claims to be an authority, whether we intentionally give them more trust or it's just wired into us, we give them more trust and a little bit more latitude than we might give some random guy who shows up in a collared shirt at our front door.
That's exactly what scammers are taking advantage of with all these scams. It’s, “I'm from the utility company.” “I'm from the security company.” “I'm from the Social Security Administration.” They don't usually come to your door; they just send you an email. But it's the same kind of thing. It's, “I'm from someone you do business with, someone you have reason to trust, so you should trust me, and you should give me what I asked for.”
That's your money in one form or another.
Yes. If they asked you for your money outright, that might cause you to step back and think, “Maybe I shouldn't do that. They have other ways of getting it.”
Money comes into the picture later on in the discussion. Usually, it's not the first thing that they say.
Sometimes they don't say it at all because—as with the power companies—they've switched you over. You don't even know they've switched over. They're getting your money and you don't even know they're doing it. Or the security company doesn't tell you they've switched out your equipment, but they have and you don't know it until you get the bill.
I know with the power company switching scam, when I was a kid, the scam was to switch people's home, long-distance service off to some provider—
Oh that long-distance service. I remember that.
Anyone who's under, probably, 40 doesn't even know what long-distance…
“What is this? How you say, ‘long-distance?'”
“What is this long-distance service?”
“You didn’t have unlimited minutes with your plan? What are you talking about?”
Was it unlimited minutes? It used to be, “Well, if you call someone in your neighborhood, it was this amount. If it was in your state, it was this amount. If it was in another state, it was a different service and it cost you a different set of money.” The popular thing was to do the slamming and switch people over to a different long distance service that costs them more, and they got the commission for selling that. It's kind of the same scam but just a different platform.
They're constantly evolving. If these security systems become obsolete, they'll find the next thing that people subscribe to. Maybe it'll be one of those subscription boxes that you get in the mail with your grocery delivery or something, and they'll find a way to switch you over to another one.
The scammers will always be changing their game, depending on what's popular and what works at that time. Are there more scams that you're seeing?
Oh, let's see. What are some more scams? What are some good ones? There's the unpaid bill scam. This is one that, again, takes advantage of the sense of urgency, creating a sense of fear. They may come to your door. More often with this one, they call you or email and they tell you, “You have not paid your bill and we're going to shut off your power if you don't pay it immediately.”
They don't tell you to go pay it through the normal channels because if you did, it would go to the actual power company. They tell you, “You must give us your credit card number right now over the phone to pay this bill. Otherwise, we're going to shut off your power in half an hour.”
People panic. They don't want that to happen. Instead of saying, “How do I know you're really from the utility company?” Or, “Maybe I should call my utility company and see if this happened.” Or, “Maybe I should just log into my account and confirm that I have actually paid my bill.” They’ll say, “Well, I don't want my power shut off here. Take my credit card and pay this bill.”
I've even seen them doing it with, “Go down to 7-11 and get a Google Play card, or an Apple iTunes card, or Target gift cards,” which always surprised me. “You want me to pay my electric bill with a Target gift card? Huh?”
That’s an odd one. I don't know if they do that so much with the electric bill scams, although they do it with lots of other things. They commonly request gift cards because they're untraceable and that's an automatic red flag for many different types of scams.They commonly request gift cards because they're untraceable and that's an automatic red flag for many types of scams. -Amy Livingston Click To Tweet
Anytime they request an untraceable form of payment, such as a gift card, or maybe a wire transfer, or crypto is a newer one. Although they don't often do that because a lot of people like me don't have a crypto wallet, wouldn’t know how to pay that. Sometimes they'll ask for payment in crypto, and they're hoping that it's not traceable. As it turns out, they're wrong about the crypto. It actually is traceable, so maybe they're wise to that one. But the gift card is pretty much untraceable. There's no way to get that money back.
It's all about non-reversible transactions. A lot of times, they'll Cash App, Venmo, these direct-transfer platforms, which basically say, “Only ever send money to your friends and family via this platform.” But scammers are very easy to convince people, that if you split your bill at the restaurant with Venmo, then you can use it to pay your electric bill. I got one of the electric bill, and the crazy thing is they were able to forge the caller ID of my actual electric company.You shouldn't assume that the number you see on your caller ID is who it says it is because it's very easy for them to spoof. -Amy Livingston Click To Tweet
You shouldn't trust the caller ID anymore. You shouldn't assume that the number you see on your caller ID is who it says it is because it's very easy for them to spoof—is the term that's used—to make it look like it's coming from a legitimate company. But if you say, “You know what? Let me call you back.” And you hang up and you call the real company at their real number, you will get the real company. You won't get the spoof number.
If they tell you to call them back at a different number, you check and it's not the number of your power company, that's one way to tumble to it that it's a spoofed call. But if you're not sure, you can always say, “Well, let me call you back.” Hang up. You call the real power company and you say, “Did you just call me about this?” If it's a scam, the answer is going to be no.
I've gotten legitimate calls from the credit card companies saying, “Hey, we're calling about a suspicious transaction.” I said, “OK, thank you very much. I'll call you back.” If it's the real credit card company, they'll almost always say, “OK, not a problem.” If it’s the scammer, they're going, “Oh, no, no, no, wait. I can help you right now.” The real company is going to be like, “Yeah, do what you need to do for your security. I don't want you to trust me. Yes, definitely call the number on the back of your card instead of providing me your information.” A real company won't get upset about that. Scammers do.
Another tip off is they want to keep you on the line. They don't want you to make that call. They asked for an untraceable form of payment. All of these are red alerts to many, many different types of scams.
They don't want you talking to other people. They don't want you, “Oh, let me log into my bank account and check there.” They’ll do everything they can to keep you away from verifying that they aren't who they say they are.Asking you for your login credentials is another big red flag for lots of different types of scams. -Amy Livingston Click To Tweet
Or, “Oh let me log into it for you. Why don't you give me your ID and password?” Which again, the real company shouldn't need to ask you for. Asking you for your login credentials is another big red flag for lots of different types of scams. Asking you for some information that the real company should have because they'll never ask you for your password over the phone. They'll say, “Log into your account yourself and tell me what you see.”
I did see a really sophisticated scam—banking scam—where the criminals were able to get through a data breach—a username and password—but they didn't know the customer's PIN code. What they would do is they would call and say, “Hey, we're so and so from the bank. Your account is being accessed right now without your permission. We need to secure your account so that the scammer can't get any money from you. We're going to send you a PIN code to authenticate that you really are the account holder and that you're not a scammer.”
While they're doing that, the scammer logs into the bank account, it generates the PIN code. The bank sends the consumer the PIN code and the consumer tells the PIN code to the scammer because they think they're talking to the bank. They think they're authenticating themself to the bank as opposed to the other way around. Then they proceed to wire transfer the money out of the account because now they've gotten full access to the account.
That's an interesting one. I don't know what the best defense against that would be aside from just calling the bank anytime you get a call saying, “I'm calling from the bank.” You say, “Let me call you back just to make sure that it's for real.”
Historically, that has been the way that I deal with any business entity other than, “Hey, we're confirming your doctor's appointment.”
Press one to confirm.
Yeah, I know that. But if it's someone claiming to be from a financial institution that I work with, all the proof relies on them. You have to prove that you are who you claim to be. “What's the account number that you're calling about?” “What is the address that you're calling about?” Usually, I wouldn't use an address because any good scammer is able to tie a phone number to an address pretty easily. I always force the other person to authenticate who they are.
That's a good rule of thumb. Again, if it's just confirming your doctor's appointment, you don't need to. But when they ask you for something, when they ask you for money, obviously, but when they ask you for information—your login credentials, your social security number—anything that they could use to get at your money, that's the point at which you say, “Let me double-check this. Let me call you back.” Make sure this is legit. And it could be. But if they are legit, they won't object.
To me, that's the big red flag if someone gets upset because you're trying to be safe and secure. No legitimate entity is going to get upset about that.
No, there's no reason.
Any other scams we should be watching out for before we wrap up here?
There's one particularly nasty one. Federal aid programs. People who are having trouble paying their bill. They'll tell you, “You know what? We can help you enroll in this federal aid program. What you should do is give us your information. We'll set up a new account for you, and you can just pay your money into that instead.”
Well, you're paying your money into this other account. It's not going to the power company; it's going to the scammers, and meanwhile, your bill is going unpaid. You risk actually having it shut off. There are legitimate federal aid programs, but they have so many people banging down their doors already. They're not going to come looking for people. You have to look, seek them out and you're lucky if you can actually get them.
That's the authority again. “We are an entity here to help you.”
“I’m from the government, and I'm here to help.” Who was it that said, those are the scariest words—“I'm from the government and I'm here to help.”
It doesn't matter what side of the aisle you're on. When you hear that, you get nervous.
Yes. It's even scarier if they're not really from the government.
Yeah. Well, cool. This has been really great information. If people want to learn more about you or Money Crashers, how can they find you on Money Crashers?
You go to moneycrashers.com. You can look for Amy Livingston, my name. Or you can look for one of these articles that I've written—home security scams, utility scams. You’ll find it with my byline and you can then click on my picture to see what else I've written for Money Crashers. You can also find my personal blog, which is about green living and how that can save you money. That's at ecofrugality.blogspot.com.
Awesome. Thank you so much for coming on the podcast today.
Thanks for having me.