Illinois Commerce Commission Fines Just Energy For Deceptive Sales and Marketing Practices, Orders Audit
The Illinois Commerce Commission (ICC) Wednesday April 21, 2010, fined alternative gas supplier Just Energy $90,000 for violations of the Alternative Gas Supplier Law (AGSL) and ordered an independent audit of its sales practices.
The Commission also ordered Just Energy, formerly doing business in Illinois under the name U.S. Energy Savings, to comply with a number of other corrective measures intended to reduce the customer complaints. If Just Energy fails to comply with the audit recommendations or the Commission’s order, the Commission noted it would make use of its authority under the Alternative Gas Supply Act to invoke possible modification, suspension or revocation of Just Energy’s authority to operate in Illinois.
Acting Chairman Manuel Flores said, “I believe these are very serious violations of the law. Penalizing this sort of behavior allows us to maintain the integrity of the marketplace for energy consumers as well as for the lawful businesses in the industry.”
The Commission also directed Just Energy to:
- Improve independent, third-party sales verification procedures by prohibiting the sales agent from being present during the verification call and requiring the verification script to gain a customer’s response to each specific fact;
- Ensure marketing materials are completely accurate and distortion-free by limiting any price comparison of Just Energy prices to the gas utility prices in which the business or residence being solicited is located. Also, any depictions of utility prices must contain at least three years of data in quarterly increments and may not depict any future price or suggest that a utility’s future prices will be higher;
- Ensure that no regional distributor or crew coordinator shall retain any commission, bonus or reward based in any way on any act or omission that violates any law, regulation or order enforced by the Commission. An incentive structure for employees or agents that rewards reduction of complaints is encouraged; and
- Forward all customer requests for service cancellations to the utility within two business days.
Just Energy is also required to notify the Commission within 24 hours of any complaints it receives, so the Commission is aware of the full extent of problems customers may be experiencing. Commission Staff will submit a quarterly report to the Commission regarding complaints against Just Energy.
“The Commission is charged with the legal authority to resolve consumer complaints and to oversee the practices of alternative gas providers,” said Commissioner Erin O’Connell-Diaz. “This will allow our staff to see all complaints up front, recognize problems and take appropriate action.”
The complaint alleged Just Energy sales agents misrepresented to consumers that they would save money under the company’s plans, failed to get proper authorization before enrolling customers in long term contracts for natural gas supply and in some instances, failed to properly disclose the prices and terms of service to customers they solicited. As a result of the number and seriousness of complaints against the company and the violations of the Alternative Gas Supplier Law, the Commission directed Just Energy to undergo an independent audit of its sales program, with a particular focus on its hiring, training and solicitation procedures, performance compensation, sales verification, complaint tracking and reporting, discipline and other compliance practices.
The Commission urged all governmental entities who receive complaints from customers to work with the Commission’s Consumer Services Division to ensure that consumer concerns and complaints with utility service providers are addressed without delay.
Commissioner Erin O’Connell-Diaz, Lula Ford and Sherman Elliott voted in support of the order. The Order noted that, based on the record in the case, the Commission’s authority to penalize the company was limited under the agency’s legal authority as mandated by the General Assembly and the Court decisions. Acting Chairman Manuel Flores and Acting Commissioner John Colgan indicated they would file dissenting opinions, believing the company should face stronger sanctions.
The Commission also took steps to better educate and protect residential and small commercial consumers by initiating new provisions in the Alternative Gas Supplier Law. The enhanced consumer protection measures enacted into law April 10, 2009, include a 10-business-day rescission period for consumers to opt out of a contract with an alternative natural gas supplier and a $50 cap on early termination fees.
The ICC Consumer Services Division is available to help consumers resolve complaints against alternative gas suppliers as well as utilities or other entities under the Commission’s jurisdiction. Consumers may file informal complaints with the Consumer Services Division at 1-800-524-0795 or electronically through the ICC’s website at www.icc.illinois.gov.
Document from: www.icc.illinois.gov
Read more about Just Energy.