What is the Utility Stimulus Grant Scam

The utility stimulus grant scam claims that a new federal stimulus bill will pay all your utility costs for a month. You won’t be given money directly. Instead, the money goes straight to your utility bill payments. All you have to do is to use the routing number provided in the email or website, and provide your Social Security Number –

Stop right there. Never give out your Social Security Number to anyone you don’t know. A stranger asking for your Social Security Number in order to give you money or the equivalent of money should always be a red flag. These strangers are not out to help you. They will not pay your bills. They want your Social Security Number and bank account number to steal your identity and milk you dry.

How the scam works

A “grant company” advertises the existence of federal grants which will pay off current month’s utility bills or give you an automatic rebate. Usually the company claims that the grants have been made available by a federal stimulus bill.

The offer is being spread through social media, text message, an advertisement on a webpage, directly by telephone, and even with fliers. You may even receive an invite from your family and friends, who have accessed the grant successfully, so far.

To access the grant, you will be told that you need to provide your Social Security Number. If you ask why, you may be told that this is your account number to prevent grant applicant duplication or to ensure that only legitimate taxpayers can access the grant funds.

The “grant company” also provides a special routing number to access the grant, usually through an automated telephone payment service. This number is always fraudulent. However, using it will look real, and you will receive a payment confirmation notice as usual.

This happens because banks can’t identify that payments are going into the wrong accounts until the local utility company reports the problem to the bank. The utility company can’t find out until the victim discovers that the bill has not been paid and complains to the utility company. By then, several days have passed, during which everything seems to have gone perfectly.

When the utility company and bank finds out that the routing number is fraudulent, the payment will be rescinded. However, because this is advertised as a time-limited grant, many people will have spread the word to their friends and family by then.

Hot spots

This scam is widespread, with reports from all parts of the United States. NBC reports at least 10,000 victims of the scam in New Jersey alone. Other hot spots include Florida, Utah, and California.

Some utility companies have started warning their customers about the scam. It has also been reported to the Better Business Bureau, although when tracked down, the scamming companies simply change their name and start again.

Genuine utility assistance programs

There is no federal stimulus program which pays utility bills directly. However, there are legitimate government programs which provide assistance with heating bills to low-income families. More information about these legitimate government programs can be found here.