$12.5B
FTC-reported fraud losses in 2024
FTC says consumers reported losing $12.5 billion to fraud in 2024.
Energy and utility MLM scheme
An energy company uses MLM recruitment to sell electricity or gas plans, with agents earning more from signing up new agents than from providing competitive energy rates.
“pyramid scheme”
↓ 8%Key indicators
Usually targetsHomeowners
Often hitsSmall business owners
Common regionUnited States
Last updated2026-04-05
Estimated impact
$4.0K
median reported loss
Typical range$400 – $80K
Recovery rate~8%
Annual reports11,000
Scam breakdown
1
The company recruits agents to sell energy plans and recruit new agents.
2
Agents earn commissions on customer signups and overrides on their recruits' sales.
3
The energy rates offered may not be competitive with standard utility rates.
4
Customer churn is high because rates increase, driving agents to constantly recruit new customers and agents.
What to do first
Compare the offered rate, including all fees, to your current utility rate before switching.
Related terms
Ambit Energy scamACN scamenergy MLMutility pyramid schemePonzi and pyramid schemesDoor-to-doorStableHomeownersSmall business ownersAdultsSmall business ownersCreators and online sellersRemote workers and job seekersUnited StatesCanadaAmbit Energy scamACN scam
Real-world example
How this scam plays out in practice
Based on reported patterns. Names and details are illustrative.
The setup
Kenji, 42, a homeowners, encountered what appeared to be a legitimate ponzi and pyramid schemes situation while using Door-to-door. The company recruits agents to sell energy plans and recruit new agents.
Step 2
What happened next was calculated: Agents earn commissions on customer signups and overrides on their recruits' sales.
Step 3
The pressure escalated quickly: The energy rates offered may not be competitive with standard utility rates.
Step 4
Then came the real trap: Customer churn is high because rates increase, driving agents to constantly recruit new customers and agents.
The outcome
Kenji realized something was wrong when energy rates are not transparently compared to current utility rates. By that point, significant damage had already been done — money sent, personal information shared, or trust exploited.
The lesson
Compare the offered rate, including all fees, to your current utility rate before switching. Kenji's experience shows why energy rates are not transparently compared to current utility rates and the pitch focuses on the business opportunity rather than energy savings are the clearest early warning signs.
How to identify it
- Energy rates are not transparently compared to current utility rates
- The pitch focuses on the business opportunity rather than energy savings
- Agents cannot clearly explain the rate structure or contract terms
- Variable rates may increase significantly after an introductory period
- Pause before paying, clicking, or sharing information. Scammers rely on speed.
- Verify the sender, company, or agency using a phone number or website you already know is legitimate.
What to do now
- ✓Compare the offered rate, including all fees, to your current utility rate before switching.
- ✓Read the full contract terms, especially variable rate clauses and early termination fees.
- ✓Check with your state public utility commission to verify the company is licensed.
- ✓Report misleading energy sales practices to your state attorney general.
What to save before reporting
- ✓Save the message, profile, phone number, email, or URL that was used.
- ✓Keep payment confirmations, receipts, and account alerts before you dispute or delete anything.
- ✓Write down the timeline while the details are still fresh.
How big is this problem
You are not alone — this scam affects millions of people.
These numbers come from government agencies and official reports. If you have been affected, know that this is a widespread problem — not something that only happens to careless people.
FTC 2024 fraud losses
Imposters
Most common FTC fraud category in 2024
FTC says imposter scams remained the most commonly reported fraud category in 2024.
History and evolution
- This scam family tends to persist because the social-engineering pressure works even when the exact scripts, platforms, and payment methods change.
- The specific packaging evolves over time, but the core pattern usually stays the same: create urgency, control the channel, and push action before verification.
- Multiple state attorneys general have investigated energy MLMs for deceptive rate comparisons and aggressive door-to-door sales tactics that target elderly homeowners.
Recovery and follow-up
- ✓Save the messages, receipts, account alerts, and transaction details before you block or delete anything.
- ✓Report the scam through the official platform or government channel that best matches where it happened.
- ✓Compare the offered rate, including all fees, to your current utility rate before switching.
- ✓Read the full contract terms, especially variable rate clauses and early termination fees.
- ✓Check with your state public utility commission to verify the company is licensed.
Why this pattern keeps working
Even when the story changes, most scams still use the same pressure pattern: urgency, authority, and a request to move money or data fast.
Multiple state attorneys general have investigated energy MLMs for deceptive rate comparisons and aggressive door-to-door sales tactics that target elderly homeowners.
State AG investigations and public utility commission complaints.
Where to report it
If you have been targeted by this scam, reporting it helps authorities track the pattern and protect others. United States has dedicated agencies that handle fraud reports.
ReportFraud.gov
Federal Trade Commission
Central U.S. consumer fraud reporting portal.
File an IC3 complaint
FBI Internet Crime Complaint Center
FBI portal for internet-enabled crime reports.
Start identity theft recovery
IdentityTheft.gov
Official U.S. identity theft recovery plan builder.
Explore further
Understand the bigger picture
Who is most at risk
Who this scam targets
Primary targets
Homeowners, Small business owners, Adults, Families
Geographic concentration
United States, Canada
Primary channel
Door-to-door — Ponzi and pyramid schemes
Why this group is vulnerable
Homeowners are particularly vulnerable because this scam exploits trust in familiar brands, authority figures, and time-sensitive decisions. The ongoing nature of reports suggests that awareness among this demographic remains low.
Sources and methodology
How we verify this information
OpenScam tracks scam patterns using a combination of government consumer protection databases (FTC, IC3, Action Fraud), platform-specific fraud reports, and verified consumer complaint data. Each entry is cross-referenced against at least two independent sources before publication.
Severity ratings are based on financial impact potential, reversibility of damage, and volume of reports across multiple reporting channels. Trend velocity reflects the rate of change in report volume over the most recent 90-day window.
This page was last verified on 2026-04-05. Red flags, recovery steps, and reporting resources are reviewed quarterly against current agency guidance.
Evidence and indicators
- Multiple state attorneys general have investigated energy MLMs for deceptive rate comparisons and aggressive door-to-door sales tactics that target elderly homeowners.
Source notes
- State AG investigations and public utility commission complaints.
Frequently asked questions
Common questions about energy and utility mlm scheme
How does the energy and utility mlm scheme work?+
The company recruits agents to sell energy plans and recruit new agents. Agents earn commissions on customer signups and overrides on their recruits' sales. The energy rates offered may not be competitive with standard utility rates. Customer churn is high because rates increase, driving agents to constantly recruit new customers and agents.
What are the warning signs of energy and utility mlm scheme?+
Energy rates are not transparently compared to current utility rates The pitch focuses on the business opportunity rather than energy savings Agents cannot clearly explain the rate structure or contract terms Variable rates may increase significantly after an introductory period
What should I do if I encounter energy and utility mlm scheme?+
Compare the offered rate, including all fees, to your current utility rate before switching. Read the full contract terms, especially variable rate clauses and early termination fees. Check with your state public utility commission to verify the company is licensed. Report misleading energy sales practices to your state attorney general.
Who is most at risk for energy and utility mlm scheme?+
This scam primarily targets Homeowners, Small business owners, Adults, Families. It is most commonly reported in United States, Canada and typically appears on Door-to-door.
Is energy and utility mlm scheme still active?+
Energy and utility MLM scheme is currently on our watch list. It has been reported across US, CA. Last updated 2026-04-05.
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Help someone avoid this scam.
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