From bogus solar power contractors to misleading claims for consumer products, green scam artists are masters of deception: Internet Scambusters #370
Showing concern for the environment and caring about energy conservation will likely fuel a big growth in green scams during the next few years.
Since crooks and unscrupulous consumer product manufacturers don't care a jot about these things, we owe it to future generations -- and Planet Earth -- to put a stop to their game.
In this issue, we look at seven of the most common green scam types and some ideas on how to avoid them.
This week's issue is especially important to us since we believe renewable energy is important and personally installed a solar electric (photovoltaic) system last month. Our system is working as promised, should pay for itself in under 5 years, and was installed by an excellent company who delivered what they said. We want to help ensure that people who make the effort to "go green" don't get scammed.
On to today's main topic...
Seven Common Green Scam Types and Seven Tips on Avoiding Them
In the few months since we last reported on the subject of green scams, a number of recent high profile incidents and actions by the Federal Trade Commission (FTC) have put the issue back in the spotlight. Read Misinformation and Good Intentions Drive Green Scams and Energy Fraud.
Two issues in particular are causing concern -- abuse of so-called "green building" and equipment programs and spurious claims about the green credentials of consumer products.
Bogus green investment schemes, which we covered in our earlier issue, have also seen an uptick.
Let's take a closer look at the first of this type of green scam -- those relating to the use of healthier and more resource-efficient techniques and materials in building construction and renovation, and in the products we put in them.
Green Building and Home Appliance Incentive Scams
The availability of grants and other incentives to encourage people to go green in their homes has combined with general consumer enthusiasm for energy-conscious living to turn this area into a very attractive target for scammers.
Recent incidents have highlighted three types of green scams in this category:
- Failure to deliver. This green scam usually applies to the planned installation of solar power systems in homes. Put simply, you pay (full cost or deposit) to have solar panels installed in your home and they never arrive. Neither does the contractor -- he disappears.Knowing solar panels are regarded as expensive by most people, and since they have a multi-year payback period, bogus contractors offer attractive prices and phony warranties to lure victims into their traps.The crime is more common than you might think -- especially with the huge growth in demand for solar energy of the past couple of years; several phony contractors have been fined or jailed recently.
Other times, contractors install products -- especially windows -- that simply don't meet the claimed environmental standards.
- The tax credit and grants green scam. It's true that you can get federal and tax credits and, in some cases, even cash grants, for green building, installing solar energy systems or using energy efficient products like modern water heaters and furnaces, and techniques like insulating your home.In some states, residents may be entitled to significant financial support for building a green home from scratch. But entitlements vary by state and the claims process can be a bit of a maze.Knowing this, it's easy for high-pressure sales people to bamboozle you by dishonestly claiming you'll get a tax credit or grant if you buy their product.
And even if you are entitled, some unscrupulous characters will make a charge for filling in the necessary paperwork, though its easy to do it yourself.
Our favorite site for reliable information is Dsireusa.org.
Bogus emails and letters seeming to come from government departments also offer non-existent refunds related to green appliances and construction projects. They're really just phishing for personal information, attempting to install malware on your PC or even advance fee frauds in which you're asked to pay an upfront "processing fee."
- Unlocking your green door. Crooks who want to get into your house may use a green scam to convince you to let them in.They usually claim to have a device to fit that will save power or water, or improve the quality of the supply. They may even say they're from the local utility company, and, in some cases they might be cheeky enough to make an appointment in advance.When they get in, one of two things will happen -- they'll steal things from your home and/or they'll install something that costs a lot of money and doesn't do what they say it will do.
Recent examples include installing water purification systems that victims simply didn't need.
The Big Greenwashing Game
Green scams that involve inaccurate or misleading claims about products or services have earned themselves their own label -- "greenwashing."
The con comes in all sorts of shapes and sizes and includes:
- Simply lying about the content or eco-friendliness of the product. A firm was recently taken to task for labeling its garments as made from "100% bamboo fibers" when they weren't. This type of green scam also includes fake certification from supposed environmental monitoring organizations. Another variation is the use of phony testimonials and endorsements for the "greenness" of a product.
- Using words like "eco," "green" and "natural" to imply a product's green credentials. In particular, using words like "greener" or "more eco friendly" are meaningless if all they really mean is that it's not quite as harmful as it used to be!In the same way, firms may use technical jargon to try to impress you, or their logos may contain images of animals or nature-type icons to suggest they're green.
- Concealing the "trade-off." This refers to the use of environmentally-damaging techniques to produce green products. For example, some paper-recycling processes may use high amounts of energy or harmful bleaches and there's no legal requirement for producers to explain this.
- Irrelevance. Some manufacturers imply they're environmentally conscientious by boasting about excluding certain chemicals -- like CFCs -- from their products, when these chemicals are illegal anyway and couldn't be used.
Some Simple Steps to Help You Avoid the Green Scam
Here are a few things you can do to spot the sort of green scams outlined in this issue:
- Always get multiple bids for construction projects and solar panel installation -- then check out the contractors with your local and state licensing bodies. Ask for references, then check them very carefully. You'll be amazed at what you can learn. The two best bids we got when we installed our photovoltaic system differed by 37% for the same system!
- Check your grant and tax credit entitlements with your state consumer organization -- many of them maintain online databases of what's available -- and by visiting official government sites. Another good site besides Dsireusa.org is the greenbuilding section of EPA.gov.
- To check claimed energy-efficiency of appliances, visit energystar.gov.
- Check credentials of door-steppers offering to sell or install green equipment in your home and never buy anything from them on the spur of the moment. Thoroughly investigate their claims.
- Be skeptical about green credentials; check content labels. Look for evidence of independent testing and certification. Remember that words like "natural" can refer to anything that occurs, well, naturally, in the environment -- even poisons!
- Consumer products that contain chemicals (bleaches for example) must file what is known as Material Safety Data Sheets (MSDS) with the Environmental Protection Agency (EPA). These are usually available online.
- If you want to make a financial investment in companies that create products that seem to benefit the environment, don't be drawn into schemes that promise unrealistic terms or unproven technology. Instead, do your research and consider investing in mutual funds or other types of companies specializing in green products and services.
Notwithstanding the current controversy about the extent of global warming, the drive to go green, to preserve resources for future generations, to produce cleaner power and to take greater responsibility in our roles as custodians of the Earth, will only intensify in the coming years.
We can expect the number and variety of green scams to grow alongside. The more we understand what it really means to be green and the more trouble we take to check out dubious claims, the better armed we will be to resist them.
Time to close -- we're off to take a walk. See you next week.