The Better Business Bureau (BBB) and Memphis Light, Gas and Water (MLGW) are warning consumers and business owners that the unpaid utility scam is once again targeting people in the Memphis area. In this ruse, scammers call and threaten to cut off your utilities if you don’t give them immediate payment over the phone. BBB received two reports of this scam in the last few days. Both victims were businesses.
An automotive shop in Cordova, TN, received one of the scam calls last week. The caller told the shop owner that her utilities were going to be cut off immediately if she didn’t pay her past due bill. The caller also said that the shop should have received notification by mail that her bank drafts could not be processed because MLGW was “going green” and the system would not be working properly during that time. The shop owner protested, telling the caller that all her payments had already cleared the bank. She even went to the MLGW website to see if she owed anything. It showed nothing past due. A “supervisor” took over the call at that point, telling her there was only one way he could stop the cut-off.
“All I had to do was take $1,900 in cash to a specific location and then I would not be cut off,” the woman told BBB. The “supervisor” told her that they would investigate her account, and if she didn’t owe the money, she would receive a refund by certified funds. “I realized it was a scam when they told me I would have to go to a specific location to pay - not just any MLGW office,” the woman said. The caller hung up on her after hearing her tell her husband she thought it was a scam.
James Knaus, owner of The Tinder Box in Collierville, TN, told BBB that his store received a similar call saying that their MLGW payment was overdue. The caller, who said his name was Tim, told Knaus that the store’s service would be cut off if the amount due was not paid immediately. This time the caller specified payment in the form of gift cards in the amount of $1202. He directed Knaus to buy the cards, then call and give him the numbers on the back of the cards. If he didn’t pay, an MLGW tech would show up within the hour to cut off power to the store.
“Well, I bit,” Knaus told BBB. “I got the cards and phoned them in. Then they said they had made a mistake and they needed another $1200 to satisfy the account.” At that point, Knaus called MLGW and found that his accounts were up to date and this was a scam. “I didn’t bite the second time,” Knaus said, “once was enough.”
The past due utility scam often targets business owners at the peak of their day. The crooks are hoping to catch businesses off guard and convince them that they’ll have no power to operate if they don’t pay up fast. Similar scam calls have targeted residential customers as well.
“At MLGW, we never demand payment or threaten to cut off services over the telephone. We certainly never tell any customers to buy prepaid debit cards or gift cards,” said MLGW President and CEO Jerry Collins Jr. “We always mail cut-off notices to customers. We also use auto-dialers that alert you in advance when a payment is due to avoid cut-off.”
“As MLGW installs more and more smart meters,” Collins added, “this will soon be an outdated scam. MLGW eventually will no longer disconnect someone’s utility by driving up in a utility truck. If you get such a call, hang up the phone. It is not MLGW.”
BBB and MLGW offer the following advice to avoid falling for one of these scams:
For more consumer tips and advice on the latest scams, visit our website at bbb.org, like us on Facebook (BBBMemphis), or follow us on Twitter (@BBBMidSouth).