Utility payment scam zaps thousands of PSE&G customers in N.J.

pseg-roseland-substation.JPGOfficials at Public Service Electric & Gas Co., the state's largest utility, said more than 10,000 customers were taken in after news of the "free" utility bill payment program quickly spread among unassuming customers who spread the news.

The scam began on the West Coast in May or possibly earlier, and then quickly moved east.

The hook — cast through phone calls, e-mails and text messages — was the same. The federal government, in a new stimulus plan, would pay that month’s utility bill. To apply, all a customer needed to do was provide a Social Security number and their own bank routing code.

None of it was true. It was just an identity theft sting aimed at stealing personal information. Plenty of people, though, took the bait.

In Louisiana and Texas, Entergy Corp. reported about 2,000 of its customers were conned. Other power companies that cover Tampa, Fla., the Carolinas, parts of Mississippi and several Midwestern states also reported hundreds more being taken in by the phony offer.

But nowhere in the nation was the scam apparently more effective than in New Jersey.

Officials at Public Service Electric & Gas Co., the state’s largest utility, said more than 10,000 customers were taken in after news of the "free" utility bill payment program quickly spread — not by the still unknown scammers, but by customers themselves, eager to share their good fortune.

Hoping to get their friends in on a good thing, scores of hoodwinked consumers started spreading what they thought was a real Federal Reserve bank routing number for the promised utility bill subsidy.

"It started spreading like wildfire from person to person," said PSE&G spokeswoman Karen Johnson.

The scam went viral, leaping across social networks like Facebook and getting forwarded to personal e-mail and contact lists, she said.

PSE&G said it spotted the scam in the spring and sent several advisory notices, Johnson said. But officials checked their databases and found a rising number of accounts were still being submitted for payment using the fake Federal Reserve routing number.

On June 7, PSE&G took action. The utility blocked the use of the purported Federal Reserve numbers as a means to pay bills electronically. Customers who tried entering such numbers into PSE&G’s online bill pay system would receive a "payment denial" message.

"We just don’t like any of our customers believing that they’re being scammed," Johnson said.

Not every customer gave up a Social Security number, she noted. Because as customers began spreading the routing number for the federal subsidy, they left out the part asking for a Social Security number. And without the accompanying request for a Social Security number, the hornet had lost its sting.

The target was always a person’s Social Security number, state officials say, because it exposes that person to identity theft.

"That’s often times the use — to open a credit card account," said Jeff Lamm, a spokesman for the state Division of Consumer Affairs.

Lamm said dozens of PSE&G customers have reported being duped by the scam, but no one has complained of monetary theft. Lamm advised anyone who gave up a Social Security number to carefully monitor credit reports so no loans or lines of credit are taken out.

State officials have yet to assess the damage because there have been no reports of money lost and no hard figure on how many Social Security numbers were actually acquired. The real potential for fraud, they say, could be ahead for the thousands of PSE&G customers duped.

Since the utility’s bill payment system has blocked the use of any Federal Reserve numbers as a means to pay bills electronically, things have quieted down. But word of the scam, and the potential for it, has reached other power companies.

Now, Johnson said, PSE&G is sharing its solution with utilities in other parts of the country: Requests for information have already come in from Florida Power & Light and Con Edison.

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