Municipal Prepaid Meters Scam
In recent years South African electricity consumers have been faced with a number of problems related to the accuracy of their meter readings and subsequent billing on their municipal accounts. These problems, having been widely publicized in the media and lead to equally widely publicized court rulings, have escalated during a period where national electricity prices are on the increase.
The combined effect of billing irregularities and escalating power prices has motivated many consumers to convert the method by which their consumption is metered from post-paid to prepaid metering and billing. While prepaid metering and billing does not shelter the consumer from price escalation, it most certainly does eliminate some of the root causes of billing irregularities, namely human error and interim readings.
While conversion to prepayment is greatly desired by most, consumers are unsure as to how to go about the conversion process and are often reluctant to approach their municipality because they have the perception that all interactions with municipal services is complicated, troublesome, confusing and very frustrating.
This unfortunate situation has been eagerly exploited by a small group of scam artists.
PrepaidMeters.co.za, a private prepayment sub-meter management and vending company, has reported that it recently encountered a number of cases where individuals masquerading as municipal or City Power employees are offering consumers to facilitate the post to prepayment conversion process. The company reports that the number of cases where consumers have fallen prey to this scam have been increasing in recent years with most cases being encountered within the City of Johannesburg region where City Power is the main supplier of electricity.
“It is in the interest of electricity consumers and our customers that we have approached the media to assist in making public the nature of the scam. It is our hope that as a result of this story that fewer consumers become victims of this scam and the scam artists will find it is increasingly difficult to take advantage of people and will ultimately cease this kind of activity.” states Sean Wheller, Chief Executive Officer for PrepaidMeters.co.za.
The scam starts with a seemingly authentic individual, in municipal or City Power clothing, presenting with seemingly authentic municipal or City Power forms and documents, approaching the consumer. The individual speaks to the consumer about their current billing with the municipality and seems interested in listening to the customers problems. When the customer is identified as having problems with a post-paid electricity bill the individual recommends that the account be converted from post-paid to prepaid billing.
Everything seems authentic, the individual seems knowledgeable and is presenting a means by which the customer will be able to convert the account without having to go through the frustration of having to engage the municipal system directly. All the customers’ needs, wants and fears are addressed and overcome. The customer is then given a hand written bill written on a triplicate pad and is asked to complete some details and sign it. The original copy is left with the customer as the reference.
At this point the consumer parts with cash as per the stipulated amount and is told that in a few days somebody will be there to install the prepaid meter and after that the customer can make purchases from the regular retail channels and will no longer receive any electricity billing on their following months municipal statement. Everyone is happy and the customer is waiting for the prepaid meter installation.
As promised, a few days later a person arrives to install a prepaid meter. The customer expects this and therefore let's everything go ahead as previously discussed and is often so impressed with the turnaround time that the solution is rapidly recommended to other people in the area.
The customer is advised that the meter has been loaded with a number of free kilo Watt hours (kWh) and that it should last a number of days so there is no immediate need to go purchase a top-up.
Unbeknown to the customer the prepaid meter is installed with a bridge which has effectively by-passed the prepayment meter and as such the number of kWh on the meter Customer Interface Unit or Keypad LCD will depreciate by very slowly. This is a design of the scam as it gives the individual enough time to work on customers in the area and make use of other satisfied customers in the area as reference, so increasing the number of people the individual can catch in a period of time.
At this point the customer has no idea that the meter is bridged and is also not aware that while they have a prepayment device installed that the device is actually property of the municipality or City Power that has been stolen from stock. Furthermore, the prepaid meter was never registered on the City of Johannesburg Prepayment Vending system.
It is only when the number of kWh starts to run low that most customers visit a retail point to purchase an electricity top-up to discover that the prepayment meter is not registered on the vending system and that they cannot purchase a token for the meter. They are advised at the retail point to contact the municipality to fix the problem.
In most cases when the customer reports the problem they are told that this is not possible as there is no record on the municipal systems and that the post-paid account has not received a final reading and is not marked such that there will be no more actual or interim readings.
In some cases customers prepayment devices reach disconnect and show 0.0 kWh by to the customers surprise the power is not disconnected. Some customers just leave it that way and do not report what is obviously a problem, taking the attitude that it is the municipality’s problem. Others report the problem and encounter the facts.
It is only at this point that customers learn and realize that they have fallen prey to a scam and are now faced with a very real legal problem because they have removed the original post-paid meter and essentially by-passed the billing system. Furthermore they are implicated in a case of municipal property theft whether that was their intent or not.
“Customers need to be made aware that everything to do with their billing at the municipality has to undergo a rigorous business process and that issuing of receipts cannot be done by anyone except via municipal or City Power customer service desk.”, says Sean Wheller “Customers should not be parting with money to any municipal or City Power employee at their premises as such transactions are not recorded on city systems and thus are untraceable.”
In addition to supplying private prepaid sub-metering equipment, management and vending services, PrepaidMeters.co.za has a department dedicated to assisting customers who require assistance in processes for application of new account connections, resolving billing disputes and conversion of accounts from post-paid to prepaid billing.
“Customers who do not wish to engage with the municipality directly, for whatever reason, need to be aware that there are other options available. Options that are safe, secure, and most of all responsible and accountable for their actions. Each month, our Municipal Liaison Department processes a large number of municipal related requests from customers in the Gauteng region. The company and the processes are all traceable.” advises Sean Wheller “Our company has good relationships with the correct people within the municipalities and is up to date with the municipal procedures. Our knowledge and experience with municipal services means that we are aware of the potential problem areas and are therefore able to pay attention to these areas in order to try to avoid issues. Ultimately, from our customers perspective, if problems do occur we stay with the case; working to provide satisfactory resolution and remain in contact with all parties.”
The moral of the story is never to deal with any person or persons that offer prepaid meters for cash on the premises. Prepaid Meters need to be registered on a vending system. If the meter is a municipal meter then it will be registered on the municipal system, if the meter is a sub-meter, then it will be registered on the vending system of sub-metering company.
The legitimate way of acquiring a municipal meter is going to the respective municipal office and applying for a prepaid meter with the correct documentation and receiving correct references that correspond also with payments made for the prepaid meter. Alternately, make use of a reputable company who you can trust to extend a power attorney limited to your requirement that can act on your behalf.
Each municipality has its own processes, but generally speaking the application itself is not sufficient in many cases if the account is in arrears. Many municipalities will first ask the resident to clear any arrears from the post-paid account before the installation of a prepaid meter. This explains just some of the complexities that involve getting a legitimate and legal municipal prepaid meter.
At PrepaidMeters.co.za the Municipal Liaison Department has seen many unfortunate cases whereby residents pay cash just to avoid dealing with municipality. Nick Botha the manager of the Municipal Liaison Department says: “There is in fact no short-cut. You should be suspicious of anyone offering any form of short-cut related to any municipal services. Municipalities are large organizations and have specific and often complex processes. At times we see that even municipality employees don’t know the processes, this occasionally opens the door for scams. My recommendation is never to pay cash for anything, unless it is at the municipal counter in their offices and they issue you a receipt and always ask questions, you have the right to know.”
PrepaidMeters.co.za is a leading supplier of prepayment electricity and water metering equipment for private sub-metering applications. The company provides national and international prepayment meter management and vending services and support.
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