In nearly every case, the caller claims that the consumer hasn’t paid utility bills and is facing an immediate cutoff in service unless payment is made. Conveniently, the scammer will accept some form of electronic payment, but rarely a credit card, which has fraud protections.

The scam is old but effective, and it's an example of the “imposter scam,” a type of crime in which someone pretends to be someone they aren’t. This type of scam, which also includes the grandparent scam, has become one of the most common in recent years.

Good news and bad news

An analysis of Federal Trade Commission (FTC) data for the first half of 2020 has some good news and some bad news. On the good side, the resport shows that the number of complaints about imposter scams has steadily gone down since 2018.

But the analysis, conducted by cybersecurity firm Atlas VPN, shows that financial losses from imposter scams rose significantly in the first half of this year. Consumers reported 168,818 cases of the imposter scam with losses totaling more than $300 million. The median loss was $694.

The takeaway from the analysis is that imposter scammers are growing more sophisticated and more persuasive. They’ve found ways to convince their victims that they are who they say they are.

As ConsumerAffairs reported in August, scammers operating the grandparent scam -- in which the imposter claims to be a grandchild in need of cash -- are gleaning information about their victims from social media. 

That suggests scammers have switched from dialing people at random to targeting specific individuals about whom they have some information.

Healthy skepticism

Law enforcement officials say consumers should always be highly skeptical of callers who demand immediate action, such as the immediate payment of money. Scammers know that if their potential victims have time to think about it, or talk to a friend or family member, they’ll see through the ruse.

Another red flag is the method of payment a scammer will demand. In recent years, criminals have instructed victims to pay using a gift card or a money card. The Santa Barbara police say utility companies would never do that and neither would any other legitimate enterprise.

The police department also says the utility company will never show up on your doorstep demanding cash. Neither will it threaten to cut off service unless immediate payment is made.