Deregulation of the energy industry was intended to give consumers a choice of electricity and natural gas providers and an opportunity to save money. However, many homeowners in deregulated states are receiving higher energy bills thanks to deceptive, and even fraudulent, door-to-door sales practices.

Deception & fraud

Not all states have deregulated. If yours has, you probably know it because you have received mailings, phone calls, and sales rep visits from companies asking you to switch from your current provider. In most cases, traditional utilities continue to transmit the energy; the new providers, offering discounts and other incentives, deliver it to customers.

Many such offers are legitimate and can potentially save you money. But others are deceptive, designed to get you to agree to switching without a full understanding of the terms. For example, a company may offer an attractive introductory rate that becomes outrageously high after the introductory period ends. These companies usually ask you to sign a long-term contract and getting out of one is likely to involve cancellation fees and a lot of hassle.

Then there are the cases of outright fraud. In the most common scam, slamming, a salesperson claims to represent your current utility company and tells you there is a problem with your account. The representative asks to see a current bill to ‘straighten out’ the issue. Instead, the crooked salesperson copies down your account number and uses it to change your provider, claiming that you requested the switch. You may not even notice you have been conned until your bills suddenly skyrocket.

Prevention starts with knowledge

As with all consumer choices, a little knowledge can go a long way. First, find out what company currently delivers and provides energy to your home. Then learn which providers operate in your city by visiting the American Coalition of Competitive Energy Suppliers website or by contacting your state’s utility regulatory commission.

If someone comes to your door purporting to represent one of these companies, ask to see a business card and personal ID. Before inviting them into your home, call his or her office to confirm the individual’s identity.

Even if an offer seems above-board, never provide a door-to-door rep with:

• A utility bill containing your account number
• Payment information such as credit card numbers
• Personal information such as your Social Security number

A legitimate alternative energy salesperson should be willing to leave materials for you to review at your leisure and research your options. Be particularly suspicious of any high-pressure tactics such as special rates if you ‘sign today.’ And, of course, if a rep makes threats or simply makes you uncomfortable, shut the door and call the police.