By Nicholas Hamner
Investment Advisor Representative
[email protected]
We talk about illegal scammers enough. The conmen, the hackers, or the people who text you out of the blue and say you owe some toll authority however much money. While plenty of people still fall victim to them, they’re fairly easy to spot. We don’t talk enough about borderline scams—those questionable businesses that aren’t quite illegal, but certainly are not doing their customers any favors. Since those types of businesses capture far more victims, we’ll talk about them this week.
Third-party electrical providers.
Because of the sky-high electric bills from the long, freezing winter, some folks are being tempted by promotional offers from non-PECO energy suppliers that tease what seem to be lower prices per kilowatt-hour (kWh). They’ve been around for a long time but their popularity waxes and wanes. You may have seen them or even signed up for one in the past. Here’s the thing: they very rarely save anyone money and more often than not cost people money. Here’s how.
Your electric bill has three separate charges that are based on your usage: 1) a generation charge 2) a transmission charge (these two are sometimes lumped together as a supply charge), and 3) a distribution charge. Every kWh you use is billed three times—for generation, for transmission, and for distribution. Those third-party providers, with the enticingly low rates? They’re only changing the supply rate costs. There’s still going to be PECO’s transmission charges. And there’s going to be PECO’s customer charge, which you get to pay for the honor of being a PECO customer.
At best, the third-party supply rate cost is within a penny or two (RIP pennies) of PECO’s, and even more likely it’s only that low for a limited time. After a period of time… six months to a year… that rate will increase to a point much higher than PECO. And worst of all, most of these third-party providers force customers to jump through hoops to cancel and go back to PECO.
So if there’s little financial benefit and in most cases operates like a bait & switch, how are these companies in business? Firstly, they do offer other benefits, like some promise the socially responsible set that all their power is sourced from green energy. Secondly—and this is the biggie—nothing they’re doing is technically illegal. It just doesn’t seem right. Per the letter of the law, they are legitimate.
Right in line with those third-party electrical providers… door-to-door contractors. We’re in the spring stormy season. If a random man in a company t-shirt knocks on your front door saying he was in the area for another job, saw your roof needed patching/siding needed fixing/tree needed cutting, and if you give him a deposit today he’ll fix it by next week… he wasn’t, it doesn’t, and he won’t. Contractors running deposit scams are a constant threat, and they’re out and about now so keep your hackles up. They may do one or two of their prepaid jobs, but more than likely they’ll disappear with your money.
And because we can’t talk about scams without mentioning computer scams… actual criminal scammers have not slowed down so you can’t stop being vigilant. Two Pennridge cases this week came from computer scams.
In the first, a person received a popup from Microsoft directing them to call a phone number. On the call, scammers convinced them their money had been stolen by a foreign company and instructed them to wire $48,000 to recover the funds. The popup wasn’t from Microsoft, the phone number wasn’t from Microsoft, the foreign company stealing funds didn’t exist and didn’t happen, but the $48,000 they wired? That was very real and now it is very gone. In the second case, a person received emails claiming there was illegal content on their computer and a monetary demand to remove it. In that second case, they called the police before doing anything else.
Be careful out there.