CU issues telephone scam alert
by RICK NORTON Associate Editor
Dec 15, 2013 | 1691 views | 0 0 comments | 21 21 recommendations | email to a friend | print

Scammers posing as utility company representatives are targeting businesses and individuals across the state and country, and now the illicit practice is slithering its way into Cleveland and Bradley County.

Tim Henderson, vice president of Administrative Services at Cleveland Utilities, issued a warning Friday to CU customers as well as to the entire community to beware of telephone callers, and perhaps even imposters claiming to be utility representatives who might come knocking on front doors.

Over the past 1 1/2 weeks, Cleveland Utilities has become aware of three instances where local businesses were contacted by telephone scammers claiming to be seeking payment on an overdue Cleveland Utilities bill. The most recent came last Thursday, Henderson said.

“So far in Cleveland, the communication [by telephone scammers] has only been to business customers,” Henderson said. “I’m not personally aware of any cases to date where these kinds of attempts have been made on residential customers.”

But statewide, residential customers are being targeted in some cities like Nashville whose primary utility — Nashville Electric Service — has issued a warning similar to Henderson’s. In cities like Memphis and Knoxville, scammers’ targets have included principally business owners. Utility companies in those cities have also issued customer warnings within the last few weeks.

Henderson detailed how the telephone scammers are operating.

“Individuals are making phone contact to area businesses stating that they are with the local power company and that their power will be disconnected unless they pay past due amounts immediately,” Henderson explained.

“The scammer is then asking for payment to be made by one of several methods, most commonly by reloadable debit cards or reusable gift cards. By taking these actions, the customers are being told they can avoid having their power disconnected.”

To date, no Cleveland Utilities business customers have fallen for the scam, but Henderson fears the perpetrators could spread their web of deceit to residential customers, some of whom could be elderly residents who often fall victim to such practices — whether it’s in Cleveland, across Tennessee or throughout the country.

Henderson urged CU customers who receive similar calls not to provide any personal identification or business financial information.

“Anyone who feels like they have been scammed, in which callers claimed to represent Cleveland Utilities or the local power company, should contact us immediately at 423-472-4521 to confirm the current status of their utility account,” Henderson stressed.

“Area residents, whether or not they are Cleveland Utilities customers, can also contact the Cleveland Police Department or the Bradley County Sheriff’s Office for information on common scams in our area.”

Paula Wills, manager of CU Customer Service and Billing, took last Thursday’s call from a Cleveland business owner who was double-checking on claims made by a telephone scammer who had contacted his company. The businessman didn’t act on the scammer’s threats, but he did report it to CU.

Like Henderson, Wills urged customers to contact the local utility company if they receive such telephone calls.

“Cleveland Utilities does not make direct phone calls to our customers regarding past due bills or to collect payments over the telephone,” Wills said.

Henderson pointed out although the utility scams have been operating in other cities and states for several weeks, and perhaps even longer, they are only now entering the Cleveland community.

He reminded Cleveland Utilities customers that employees all wear CU photo identification. In the event customers are approached at their homes by anyone claiming to be a CU employee, the visitor should be asked to show the ID.

Customers who still have doubts should contact the utility company. Telephone callers claiming to be CU representatives should also be asked for names and ID numbers, both of which can be verified by calling the local utility company.

“Apparently this has been going on for quite some time, but for us, the first call came just a little over a week ago,” Henderson said. “The most recent was Dec. 12.”

In Nashville, utility warnings went out in late April. In Knoxville, the first warnings came in early September and in Memphis the utility company there issued alerts about two weeks later.

The Nashville issuance, which came from the NES utility, warned its customers of “... fake utility workers who recently targeted an elderly woman and stole items from her home.”

According to the utility’s alert, two young men with safety vests approached the woman and said they worked for NES. The pair told the customer they were installing new wire underground to improve reliability and prevent power outages.

While the customer was led outside to view where digging would take place, the other man gained access to her home and searched her belongings, the NES warning described.

“Customers should be aware of potential scammers who frequently target the elderly and often try to enter a person’s home or ask for payment information,” the NES alert advised.

Like the Cleveland Utilities warning, the NES advisory urged customers still in doubt about a worker’s authenticity to contact NES immediately and to ask the visitor to wait outside until verification is made.

In Knoxville, scammers are reportedly preying on locally owned restaurants.

According to a Knoxville Utility Board alert dated Sept. 5, “... Locally owned restaurants [who are KUB customers] are reporting that someone is calling, claiming to be from KUB to say they owe money on their account. The caller also asked for customers to purchase MoneyPaks in specified amounts, giving detailed explanations of how the MoneyPaks are used, and threatened to cut off the customer’s power if payment wasn’t made.”

The KUB alert stressed, “This is a scam.”

The warning, which reported these phone calls are being made to eateries throughout Knox County, goes on to explain, “The imposter is requesting that the restaurant owners provide the serial numbers of the MoneyPaks once purchased to collect the money.”

Henderson described MoneyPaks as reloadable debit cards that can be purchased in most major department stores, pharmacies and a variety of other locations.

News accounts across the nation are beginning to report of instances where scammers are making growing use of these cards because they are more convenient than money wires (a longtime vessel for scammers) and they are reportedly just as untraceable. According to published reports, these types of cards can be used to pay telephone, cable and credit card bills, among other potential uses. Often, the cards are used by people who don’t have, or perhaps who don’t want, a bank account. But other consumers use them, as well.

On their websites, companies that offer MoneyPaks traditionally warn users not to share their account numbers with strangers — as would be the same type of advice also given for more conventional types of payment like standard credit and debit cards. Recent news accounts of these types of scams have agreed the cards are not the problem. The issue is the scammers who have discovered a new tool for robbing consumers.

Another Tennessee city reporting recent scam activity is Memphis. In the Bluff City, commercial and business customers are being targeted, and scammers are using reusable gift cards as their primary tool, according to a Memphis Light, Gas and Water Division alert that went out to customers on Sept. 18.

“The scammer is instructing customers that MLGW has a new payment system and any payments made previously were not accepted into the new system,” the MLGW warning stated. “The scammer instructs the customer to make a payment again; however, the customer is instructed to purchase and use a reusable gift card that equals the bill payment amount. After that, the customer is told to call the scammer back with the gift card’s ID number in order to post payment. If the customer does not make the payment by 5 p.m., the customer is threatened with a utility service cut-off.”

MLGW is the largest three-service public power utility in the nation, serving more than 421,000 customers in Memphis and Shelby County, the alert cited.