Electricity Supplier to Pay $4 Million Over Alleged Deceptive Marketing and Sales That Overcharged Consumers
AG Alleges “Just Energy” Harmed Consumers with Falsely Promised Savings, Unauthorized Switching, and Sizeable Termination Fees; Settlement to Provide Restitution
BOSTON – A competitive retail electricity supplier in Massachusetts has agreed to pay $4 million to settle allegations of deceptive marketing and sales that promised savings but charged significantly higher rates, entered consumers into agreements without their consent, and charged costly termination fees, Attorney General Martha Coakley announced today.
The assurance of discontinuance with Just Energy Group Inc. and its affiliates was filed in Suffolk Superior Court. The AG’s Office alleges that Just Energy, through a third-party telemarketing vendor and door-to-door agents, engaged in deceptive marketing and sales that misled consumers into signing contracts based on attractive introductory pricing, only to later increase their electricity supply costs.
“We allege this competitive supplier engaged in widespread and misleading conduct that lured consumers into costly contracts in the form of high electricity rates and termination fees,” AG Coakley said. “As residents in Massachusetts face rising electricity bills this winter, our office will continue to protect consumers from deceptive sales practices.”
According to the settlement, Just Energy sales representatives allegedly failed to disclose complete and accurate pricing information to its customers by promising savings or representing that they could help consumers keep their electricity bills low. Instead, consumers were charged rates that were higher than the rates for the electricity supply provided by NSTAR and National Grid. Just Energy also allegedly induced elderly and non-native English speaking consumers by continuing to offer electricity supply services even after it became clear that they did not understand the terms of the proposed contract.
Consumers were allegedly switched from their distribution company to Just Energy without their authorization. Termination fees worth tens of thousands of dollars were allegedly charged to small business owners, even though they were never previously advised of the charges.
The AG’s Office alleges that Just Energy made false representations concerning its electricity products, including that its products would provide “green” or “renewable” energy at prices comparable to basic service, and that its products were offered as part of a state-run program. Just Energy also allegedly misled consumers about their affiliation with the customer’s utility company.
Under the terms of the settlement, Just Energy will pay a total of $4 million, including $3.8 million to an independent trust fund for purposes of making payments of restitution to certain consumers, and $200,000 to the Commonwealth. Just Energy cooperated with the Attorney General’s investigation.
Just Energy has also agreed to waive all early termination fees for all residential customers on variable rate contracts, except those that are on introductory rates at the time of early termination. Just Energy is required to no longer make false representations in its marketing materials claiming that consumers will save money on electricity bills as a result of switching to its services. Just Energy has also agreed not to enroll low-income customers unless it guarantees savings to those customers, and will engage an independent monitor to ensure compliance and appropriate door-to-door sales operations in Massachusetts.
The AG’s Office has received more than 100 consumer complaints concerning Just Energy’s unfair and deceptive conduct. AG Coakley offers the following tips for consumers who may be affected by allegedly deceptive marketing practices by energy supply companies:
- Check your bills: Consumers should check to make sure that they have not been switched to Just Energy or any other supplier without their consent. National Grid customers should check the “Supply Services” charge on their electricity bills, while NSTAR customers should check the “Generation Charges” charge on their electricity bills.
- Protect your information: Consumers should not provide their electricity bill to sales representatives from competitive suppliers, such as Just Energy, unless they are willing to enter into an agreement to purchase their electricity supply from a competitive supplier.
- Be cautious of sales tactics: Consumers should be aware that their distribution company will not send representatives to their door or call them on the phone to talk about electricity supply rates. If a representative contacts you about electricity supply rates, this person most likely works for a competitive supplier, such as Just Energy.
- Know your rights: Consumers should not let door-to-door sales persons into their home unless the consumer knows them personally. Consumers should contact local law enforcement authorities if the sales agent refuses to leave or the consumer believes that the sales agent poses a threat to the safety of the consumer or others.
Any consumer or retailer with concerns about these deceptive marketing practices should file a complaint with the AG’s Office or call the consumer hotline at (617) 727-8400. Consumers with questions can also contact the Consumer Division of the Department of Public Utilities at (877) 886-5066.
This case is being handled by Division Chief Jesse Reyes and Assistant Attorneys General Nathan Forster and Elizabeth Anderson, all of AG Coakley’s Energy & Telecommunications Division, along with Business and Labor Bureau Chief Robert Ross.