CBIA Energy Connections Team Warns of Contract Scam

05.14.2021
Small Business

Over the past month, several CBIA member companies have been unwittingly switched to a new electricity contract after speaking with an energy broker or supplier promising lower than market rates.

CBIA Energy Connections director of operations Tom Guerra says the scam is called “slamming,” and begins when an unscrupulous broker/supplier calls a business from a toll-free telephone number.

“They request a copy of the customer’s invoice, which they build into a contract, and then use a recording of the customer’s voice as consent to execute the new contract without their signature, and often, knowledge,” Guerra explained.

This results in cancellation of the target business’ existing agreement and generates a substantial early termination fee.

“As such, it is in your best interest to never give your account information to anyone over the phone who you don’t fully know,” Guerra said.

‘Questionable’ Practices

Guerra said some broker/suppliers are using questionable business practices to manipulate customers into a contract which they do not understand or even want.

Touted as “fully fixed,” these contracts are one-month agreements with low introductory pricing which often doubles by the second month.

“Like the old adage says, ‘if it sounds too good to be true, it usually is,'” Guerra said.

When you enter into a contract, your supplier purchases your power in advance for the length of your contract term.

“If it sounds too good to be true, it usually is.”

CBIA’s Tom Guerra

If you switch away to another electricity provider while under contract, your original supplier must sell that unused power back at current market rates, often at a loss.

This amount is then passed back to the customer as an ETF.

Guerra urges CBIA member companies to call the Energy Connections team first with any questions regarding existing contracts.

“CBIA has been doing this for a long time because we always act in your best interest while we monitor the markets daily for opportunities for you to renew at a time when it makes the most sense,” he said.


For more information, contact the CBIA Energy Connections team: Tom Guerra (860.244.1160), Liann Pelletier (860.244.1963), or Bill Walsh (860.244.1942).

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