April 18, 2024

How to avoid falling victim to energy scams

Energy markets are complicated. Factors driving the energy bills we ultimately pay are always in flux and prices are increasingly volatile. It can be confusing at the best of times, and while nobody understands a business as deeply as the business owner, being the owner of a business is a more-than-full-time job. It’s not feasible for most business owners to be energy experts as well. That's why many turn to experts for help.

Energy is one of the biggest expenses for most businesses. As a business owner, you work hard to keep the lights on, both literally and figuratively.  Scammers know this. They know you have a business to run, they know you don’t have time to deal with a power outage, and they know that you’re focused on keeping your costs down wherever you can. They also know that you’re not an energy expert and they’ve gotten very good at taking advantage of this knowledge. In just a few minutes, they can end up costing you a lot of money—and a lot of time.

Make sure you know who you’re talking to. Never give anyone account information over the phone, or in person if they just walk into your business. You can always call the company back at the phone number on your bill and you can always call to verify the identity of someone who walks into your business. If they get upset or impatient when you tell them that you need to verify their identity, it’s a red flag: Be more cautious, not less. At David Energy, we've seen it all, and we can help you make sure that you're not paying more than you should.

Slamming: Unauthorized switching of suppliers

One month your electricity bill is from the supplier you signed a contract with, at the price you agreed to pay. But the next month you’re looking at a bill with much higher rates from a supplier you don’t recognize. This is called slamming. It occurs without your consent or knowledge, and you aren’t likely to find out about it until you get hit with that big bill.

How does slamming happen? Someone got hold of your utility account information. They may have called you or one of your employees under the guise of being your supplier or your local utility, trying to resolve a problem with your account or your electric service. By trying to prevent an issue, you instead inadvertently give them the information they need to switch you to a supplier that you never agreed to use. Some businesses never notice that this happened. Slammers are counting on you not noticing. At least not for a few months.

Not all bad deals are the result of scammers. Thankfully there are ways to spot a bad deal and avoid being affected by a slamming scheme.

Be aware of phishing attacks

The types of phishing attacks that you may be targeted with typically come over the phone or in-person.


An in-person scammer will usually walk into your business and ask about your utility account information while pretending to represent the electric utility. They may ask to inspect your system or ask for payment directly. Know that this is not how a utility company will typically contact you. You will usually receive contact before a visit, and will never be asked to pay your bill directly to an individual. Utility workers will also have credentials, and you can always call the utility on a phone number that you look up to verify that they are, in fact,  a utility employee.  

Over the phone

An attack over the phone is more common. You may receive a call from someone claiming to represent your utility provider, energy broker, or energy supplier. During the call, they may make a claim about shutting down your service if they don’t receive payment, or try to convince you that your contract is expiring. They may ask for potentially sensitive information to verify your account. These are typically things that you would have received notice about prior to the phone call, so if it sounds suspicious, it likely is. Tell them you will call your account representative right back, then do exactly that.

Don’t just read the contract: Understand it

Like many contracts, energy contracts can be difficult to understand. They can seem dense with legalese and specific energy terminology. There might be terms or language that you don’t fully understand.  A good supplier will not hesitate to answer your questions, and to do it in writing.  Make sure you get these questions answered via email, not just on the phone or in person.

Make sure the contract clearly states that the rates are fixed for the duration you spoke to the representative about if you’re agreeing to a fixed rate contract.

Remember: you pay electricity bills, not energy rates.  The energy rate is only one part of your bill. Other components, like transmission charges, distribution charges, and capacity costs can easily comprise a third or more of your electricity bill. Some energy rates include things like capacity costs and some pass them through to you separately. Both types have their advantages, but you need to know what you’re agreeing to in order to avoid surprises after you sign the contract.

If you ask for clarification but still can’t understand the contract after you get responses, it’s possible that you’re not meant to understand it and that should be a red flag.

Lock in reliable suppliers

Falling for a scam can be financially devastating and require a significant amount of time to recover all of your accounts. Luckily, there are reliable suppliers out there with strong reputations for helping businesses get the best deal on energy. When you find one, it’s great to lock in with them. 

At David Energy, we pride ourselves on taking care of our customers. Not only can we help you understand your energy costs and optimize your energy consumption through our proprietary software, but we can also provide peace of mind by providing an extra layer of protection from scammers. David Energy will:

  • Check your bill: Keep tabs on your energy rate, consumption, total cost, and supplier. If anything seems out of place, David Energy can help.
  • Help with slamming: If you find yourself in a spot where your supplier gets switched without your knowledge or approval, David Energy’s experts can help you navigate the situation.

Need help with a slamming issue?

Book a meeting with our team here.

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