Welcome to the Department of Justice, Iowa Attorney General Tom Miller

For immediate release -- Tuesday, November 18, 1997.


Miller: Be Alert for Coming "Power Scams"

Attorneys General mobilize to head off consumer scams that are expected to surface with the coming of electric power deregulation.

WASHINGTON, 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.

"We 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 for them."

Miller 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.

Miller 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 all states.

"Electric 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."

Miller 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.

"Where 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."

As 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.

Miller 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.

The 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.

At 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.

"In 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.