KPRC 2 Investigates: Are you paying for someone else’s electricity? One man found out the hard way - after discovering 7 fake accounts

The steps to prevent it and how to fight back
The steps to prevent it and how to fight back

No matter where you live, whether you rent or own your home, everyone has to pay for electricity. But what you may not realize is that you may be paying for someone else’s electricity. People are using stolen identification to open accounts with electricity providers. KPRC 2 Investigates reveals how electricity companies are doing very little to stop this from happening, but there are some things you should be doing to protect private information.

Thieves use social security numbers to open fake accounts

You turn off the lights when you leave a room, close your blinds to keep out the sun and adjust your thermostat to conserve energy. Craig Kooken did everything within his control to keep his electric bill low. What he couldn’t control were the thieves racking up $4,469 in his name.

“It’s a matter of someone stealing your social security number and using a fake email address and a fake phone number,” said Kooken.

No one knows where thieves got Kooken’s social security number, but we do know once they had it they used it to apply for electricity at seven different addresses with seven different electric providers. Over three months last year, the people who lived at an apartment complex and homes in Humble, Spring, and Katy used the electricity, never paid the bills, and then quietly moved on.

By the time Kooken received the collection notices in November, his pristine credit score had plummeted from 832 to 690.

“It was a nightmare. It was a nightmare,” Kooken said.

KPRC 2 Investigates ID theft fraud

KPRC 2 Investigates contacted all seven electric companies where fraudulent accounts with Kooken’s information were opened. None of them told us what they’re doing to authenticate new customers.

This is not a new problem. In 2013, KPRC 2 investigates showed you a similar story about electric company ID theft fraud.

“A criminal takes advantage of lax internal controls in a company, and that’s where they’re kind of intelligent,” said John Shirley with HPD. “They look for the holes.”

Back then, Direct Energy’s Senior Vice President told KPRC 2 Investigates that he did not think it was too easy to set up an electric account using someone else’s social security number.

But eight years later, Direct Energy, where one fraudulent account under Kooken’s name was opened, has made no changes to make it harder for people to open fake accounts under another name.

“The definition of insanity is doing the same thing over and over again, expecting different results,” said Kooken. “You know, if they’re making money, what do they care.”

The Public Utility Commission’s Director of Customer Protection Richard Saldana said electric providers want to make it easy for customers to get service, which is why most companies only require a social security number and a name. No one at the electric company is doing any checks to verify the identity of the applicant.

Businesses all over the world are struggling with this problem.

“Authentication and identity management is a big, tough problem to solve,” Tom Gorup of Alert Logic.

Gorup is the Vice President of Security Operations at Alert Logic and helps companies protect customer information. He said the programs to help companies verify the identities of applicants are available.

An example of identity verification is when authentication software asks a series of questions that only you would know, like the name of the street where you lived 20 years ago.

From a financial standpoint, businesses would only want to invest in authentication software if they are losing more money to electricity fraud.

According to the PUC, consumers in Texas filed a total of 25 complaints related to identity theft and utility services registration from Sept. 1, 2020 to August 30, 2021.

Steps to stop thieves from opening accounts in your name

Here are a few things you can do to help protect your personal information.

  • Be picky about where you write your social security number

Often when you are filling out forms, the business may ask for your social security number as part of the onboarding process.

“You can think twice before putting your social security number down on a piece of paper,” said Gorup. “Even when companies or doctors ask for it, they usually don’t need it. Leave the space blank.”

  • Don’t use the same passwords

You’ve probably heard this before but it is one of the best ways to keep your identity safe. Gorup suggests using different passwords for different accounts. And if you think this sounds like a hassle, take it from Kooken, cleaning up the mess after the fraud is much worse.

“It probably took five months. Five months,” Kooken said. “And that was me working hard at it- being tenacious.”

If this happens to you and the electric companies aren’t cooperating clearing your name, you can file a complaint with the Public Utilities Commission of Texas. You can call them at 888-782-8477. The commission said it can reach out to the company on your behalf to speed things up.

  • Consider checking your credit report often

There are services that can help monitor your credit reports. They can flag any problem areas and help catch crooks before the problem gets too out of hand.

What do you do if someone steals your social security number?

ID theft, Social Security, fingerprint (Graham Media Group)

Millions of Americans are victims of identity theft every year. If it happens to you, it’s confusing and time-consuming trying to sort everything out.

  1. File a report either with the Federal Trade Commission at www.identitytheft.gov or with your local police department.
  2. Call all of the companies where the fraud occurred. Ask to speak to someone in the fraud department and let them know you have an ID theft report filed with the FTC or police.
  3. Lastly, contact each credit bureau and provide them with that same ID theft report. Request that the fraudulent activity is removed from your report.

You should follow up and check your credit report in the weeks and months after taking these steps to make sure all of the fraudulent activity and accounts have been removed.

RELATED: Earlier this year KPRC 2 Investigates looked into mail ID theft rising in some Houston neighborhoods.


About the Authors:

Passionate consumer advocate, mom of 3, addicted to coffee, hairspray and pastries.