Energy Co. Under Fire For Deceptive Sales Tactics
by Pam Zekman, CBS 2 Chicago
by Pam Zekman, CBS 2 Chicago
Renee Green was busy feeding her children when a salesman for Just Energy got his foot in her door saying: "I know how to save you guys money."
Green said it was an appealing pitch.
"I mean, we're pinching pennies right now," she said.
The amount you pay for gas is based on the number of therms you use, and prices per therm can fluctuate.
Just Energy says that under its fixed price program, you'll be protected against energy price volatility.
The Citizens Utility Board, or CUB, has been tracking the deals offered to customers by U.S. Energy for years.
"Historically, about 98 percent of them in fact have lost money or are losing money for consumers," said CUB Executive Director David Kolata.
Kolata explained that when you sign a contract at a fixed rate that is higher than you are currently charged, you are taking a gamble that it will go much higher than what you are paying.
Green says her Just Energy salesman told her: "If I signed this, Nicor cannot charge me more than 79 cents a therm. It could go lower, but not over 79 cents."
He actually signed her to a 5-year contract to pay a total of $1.04 a therm.
CUB roughly estimates that using the rate Green was charged, a typical customer who has used 1,000 therms over the last six months would have paid about $500 with Nicor, compared to $1,040 with Just Energy. In other words, Green would have lost about $500.
"I definitely felt like I was scammed," Green said.
She filed a complaint with CUB, and Just Energy canceled the contract.
In another case, a salesman asked to see 65-year-old retiree and homeowner Lillie Johnson's Peoples Gas bill, apparently so he could jot down her account number and switch her to Just Energy without her permission.
"I never signed anything," said Johnson. "What he did was fraud. It was fraud."
That's why she was shocked when she was notified that her gas supplier was changed to Just Energy. After she complained to the Attorney General and to Just Energy, the company canceled the account, switched her back to Peoples Gas, and the sales agent is no longer with the company.
Two years ago, a CBS 2 investigative producer worked undercover as a sales trainee and learned firsthand about the misleading pitches used by salesmen for U.S. Energy, the old name for Just Energy.
The Illinois Attorney General's office charged Illinois Energy Savings Corporation, its parent company, and U.S. Energy with consumer fraud.
Last May, the company settled the case without admitting any guilt. In the consent decree, the company agreed to a long list of disclosures its staff would be required to make in soliciting business, and in its written materials.
But Kolata says that based on the complaints the Citizens Utility Board has received, it appears that although U.S. Energy changed its name to Just Energy, salesmen still seem to be using some of the same deceptive games to sign up business.
"We need to put a stop to it as soon as possible," Kolata said.
CUB is trying to do just that in a pending complaint before the Illinois Commerce Commission.
Just Energy fired the salesman in Johnson's case and canceled both her contract and Green's contract, before they ever made a payment.
Gord Potter, Executive Vice President of Just Energy, says it verifies the terms of its contracts with calls and letters to its customers, and did so in Green's case.
Potter says the company has implemented a number of corrective changes since the 2008 CBS 2 investigation, and is in compliance with its settlement agreement with the Attorney General's office.
"While hearing about even one unsatisfied customer bothers me, at the same time these instances are not a reflection on the quality of our product," Potter said. "We have served hundreds of thousands of customers in Illinois."
About 10,500 U.S. Energy customers have gotten refunds from a million dollar fund the company set aside in response to the Attorney General's lawsuit.
If you have complaints about Just Energy, contact the Attorney General's office at (312) 814-3000 or the Citizens Utility Board at (800) 669-5556. You can also contact the Illinois Commerce Commission at (800) 524-0795.