Udall Urges FTC to Investigate Telephone Scams in New Mexico
Scam artists targeting utility customers, demanding payment and threatening to cut off electricity
WASHINGTON - Today, U.S. Senator Tom Udall wrote a letter to Federal Trade Commission (FTC) Chairwoman Edith Ramirez, asking her to take "aggressive action" to investigate and prevent telephone scams targeting utility customers in New Mexico.
Over 130 N.M. utility customers have been targeted so far. Some have lost of thousands of dollars in the telephone scams, in which callers threaten to disconnect electric service unless the customer sends money via prepaid card or online payment. The scammers are using a practice known as caller ID "spoofing," in which the telephone call appears to originate from the utility company. In one disturbing case, a customer was allegedly threatened to pay or face an "explosion." Another customer was defrauded of $4,000.
"Given the nature and scale of this problem, I urge the Commission to use direct outreach methods to warn businesses and consumers about this fraud," wrote Udall, who serves on the Appropriations Subcommittee on Financial Services and General Government, which oversees and funds the FTC.
Many of the victims have been customers of PNM Resources (PNM), the parent company of Public Service Company of New Mexico and the largest utility in the state. The utility has warned its customers through a variety of methods.
Udall said that the PNM customers who have been targeted so far include restaurant owners, who received calls during busy times.
"Taken by surprise, a manager or small business owner might make a quick payment to avoid losing power. One restaurant happened to have had a previous late utility payment and unfortunately was defrauded of $1,500 in the scam," Udall wrote.
Udall, who previously served as New Mexico State Attorney General and as a federal prosecutor, has long worked to crack down on telemarketing scams and consumer fraud. He wrote that the scams could violate several federal laws designed to protect against telemarketing and consumer fraud and abuse. Moreover, he wrote, claiming to be a utility company representative and using caller ID "spoofing" to con people could violate the Truth in Caller ID Act.
"I therefore ask that the Commission investigate these telephone scams and take aggressive action to protect New Mexico consumers," Udall wrote.
A copy of the letter is available HERE.
The text of the letter follows:
Dear Chairwoman Ramirez,
I am writing to request that the Federal Trade Commission take action to prevent telephone scams affecting utility customers in New Mexico and across the country.
The scam involves telephone callers claiming to be from a utility company and then employing a variety of techniques to defraud customers. Some threaten customers with disconnecting electric service to their home or business. The scam artist instructs them to send money via prepaid card or online payment service before their power is shut off. The scammer's caller ID appears to originate from the utility company, a practice known as "spoofing." In a more sinister case, a customer was allegedly threatened to send payment or face an "explosion."
PNM Resources (PNM), the parent company of Public Service Company of New Mexico, is the largest electric utility in our state. PNM recently contacted the Commission with information that the company gathered about such scams targeting businesses and individuals. More than 130 PNM customers have been targeted so far, including some who unfortunately lost money in the scam. According to PNM, the frauds generally involve payments of a few hundred dollars, but one business paid about $4,000. Those targeted include restaurants during busy times, such as during lunch service. Taken by surprise, a manager or small business owner might make a quick payment to avoid losing power. One restaurant happened to have had a previous late utility payment and unfortunately was defrauded of $1500 in the scam.
PNM has warned customers through the media, bill inserts, and social media. Some victims have filed reports with local police. Yet given the nature and scale of this problem, I urge the Commission to use direct outreach methods to warn businesses and consumers about this fraud.
These scams could constitute violations of Section 5 of the Federal Trade Commission Act (15 U.S.C 45). The use of intimidation and threats of shutting off power to a home or business to carry out these scams could also violate rules promulgated by the Commission pursuant to the Telemarketing and Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6101-6108). Moreover, claiming to be a utility company representative and using caller ID "spoofing" to help con people could violate the Truth in Caller ID Act (47 U.S.C. 227(e)).
I therefore ask that the Commission investigate these telephone scams and take aggressive action to protect New Mexico consumers.
Thank you for your consideration and reply. I look forward to working with you on this important consumer protection issue.
United States Senator