Miller: Be Alert for Coming "Power Scams"
General mobilize to head off consumer scams that are expected to surface
with the coming of electric power deregulation.
D.C. Deregulation in the system of supplying electric power is very
likely to spark a surge in consumer protection problems, according to
Iowa Attorney General Tom Miller and a new task force of State Attorneys
General who aim to head off the problem before it explodes.
expect con-artists to try the same tricks they've used for telephone
'slamming' in the wake of long-distance deregulation," Miller said at
a news conference today in Washington, D.C. "But we're getting ready
said the National Association of Attorneys General has created a special
enforcement task force to monitor industry practices in the deregulated
electricity industry to ensure that consumers will not be victimized
by misleading or deceptive practices.
noted that Iowa has not deregulated electric power supply. He said at
least eleven states will permit broader competition among power providers
by or after January 1, 1998, and that the issue is brewing in almost
power is a huge business," Miller said. "At $200 billion a year, it
is several times as big as the long distance telephone business. We
have no doubt con-artists will go where the money is, so we are organizing
to stay a step ahead of them and put consumers on alert."
said Iowans already may face Internet-based pyramid scams. "We know
there are e-mail and Internet messages telling people they can make
a fortune in money-making opportunities arising from the opening up
of competition in California and more and more states." He advised consumers
to be very leery of any plan requiring an up-front fee to participate
in marketing schemes that promise huge profits from electricity deregulation.
there is deregulation, we anticipate that 'slamming' will be a big threat,"
Miller added. "Unfortunately, the analogy to phone slamming -- Iowa's
number-one consumer complaint this year -- is almost perfect."
with telephone slamming, he said, people may have their electric service
switched to a different provider without their permission. They may
face a maze of misleading mail or telephone solicitations and claims.
said consumers will have to take the same measures that protect them
from telephone slamming: checking their billing statements every month,
avoiding contest forms or other tricks con-artists use to get your signature,
and even "locking" your service into a specific provider unless you
give a written authorization to switch.
news conference was part of a day-long National Association of Attorneys
General hearing today [Tuesday] on the impact of utility deregulation,
covering various issues in addition to expected consumer scams. The
Washington hearing is the second of three that NAAG is conducting around
the country on the subject.
the news conference, Miller said Attorneys General were resolved to
take early action because of their experience with con-artists taking
advantage of long distance deregulation.
Iowa, we often say, 'Fool me once, shame on you; fool me twice, shame
on me.' We want to be sure consumers are ready for utility deregulation
con-artists," he said.