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Energy Firm Settlements

January 16, 2015—As winter settles in across the nation energy bills are on the rise, and so are the utility bill scams. In recent weeks, attorneys general and utility companies, such as Duke Energy, have been warning consumers to beware of utility bill scams. Among the most common are scams involving people who pose as a customer's utility company's billing representative. These scams trick customers into giving up credit card and account information by calling customers and telling them that their energy is going to be cut off if they do not pay their utility bill within the next hour. They then urge the customer to give out their information over the phone, effectively stealing their identities.

However, sometimes these scams come from actual utility providers themselves. In the past two weeks several third-party energy suppliers have come under fire from the states where they reside. Just Energy Inc. and its affiliated companies have, according to a press release from the Massachusetts attorney general, agreed to pay $4 million as a part of their settlement for engaging in deceptive marketing and sales practices that misled their consumers into believing they would save money over their current providers. Just Energy offered their customers low introductory rates, only to suddenly hike those rates after the introductory period had ended and then charge costly termination fees alleges Attorney General Martha Coakley of Massachusetts. Of the $4 million that Just Energy has agreed to pay, $200,000 will go to the Commonwealth. The balance of $3.8 million goes towards consumer restitution.

HIKO Energy LLC has also agreed to pay $2.1 million, including $1.82 million in consumer restitution, as a result of similar allegations in New Jersey. HIKO was charged with aggressively soliciting customers with written promises to decrease their bills 10 percent from the rates charged by their current energy distributors, only to later raise their own rates significantly as a result of the previous winter's surge in energy costs. They also allegedly engaged in "slamming" their customers, or, switching their electric and/or natural gas accounts without their knowledge or consent.

Unfortunately, these two instances represent only a small portion of such cases happening across the United States. In fact, the HIKO lawsuit was just one of three similar lawsuits pending in New Jersey. Several more companies go unchecked simply because they are smaller companies with fewer customers, and, therefore, not enough complaints to address fraud complaints made against them. (Just Energy received over 100 complaints in Massachusetts, alone.) Attorney General Martha Coakley, Attorney General Kathleen G. Kane, and several other interest groups such as the AARP have given advice on how consumers can beware such schemes.

Sources: AARP, Massachusetts attorney general, media reports