Illinois Attorney General Settles Fraud Claims Against Energy Companies for Over $3M

by Andrew Murray | September 25th, 2019

On August, 19, 2019, the Illinois Attorney General announced the settlement with three energy companies of consumer fraud violations. The press release states:

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Attorney General Kwame Raoul today announced three settlements totaling more than $3.1 million with alternative retail electric suppliers Major Energy Electric Services LLC (Major), Eligo Energy IL, LLC (Eligo), and Realgy, LLC (Realgy). Raoul alleged that the companies and their sales representatives used aggressive and deceptive tactics to enroll customers in the ComEd territory into unnecessarily expensive contracts for electricity.

Under the settlements, Major, Eligo, and Realgy will provide refunds to more than 35,000 Illinois customers totaling more than $3.1 million. Refund amounts will be based on customers’ electricity usage. Additionally, all three companies will be, or have been, suspended from certain marketing activities: Eligo will be banned from telemarketing and door-to-door marketing for three years and Realgy’s suspension on door-to-door marketing extends four years from its last campaign in September 2016, or until September 2020. As a result of the Attorney General’s lawsuit against Major, it has ceased all marketing for the past 15 months and is only able to resume marketing with additional restrictions and oversight imposed by the Attorney General’s Office.

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The Attorney General’s office’s 2018 lawsuit against Major alleged that sales agents failed to disclose information, including such critical terms as the price and length of the contracts. Raoul alleged many customers were given the false impression they were signing up for a discounted rate from ComEd or that they were going to save money through what turned out to be a fake energy choice program. In reality, Major’s customers paid higher prices for their electricity than they would have paid with ComEd a staggering nine out of 10 times. Current and former Major customers will receive nearly $2 million in refunds under the settlement.

Raoul’s investigation of Eligo found sales agents failed to disclose its rates and fees, referenced a fake energy choice program, and promised customers would save up to 20 percent with Eligo – even though most customers paid more than they would have with ComEd. In addition, Eligo’s sales agents routinely misled consumers by telling them that they were calling to correct an overcharge the consumer may have experienced on the last ComEd billing cycle, when in fact Eligo was attempting to switch the consumer’s electricity supplier. Current and former Eligo customers will receive $1 million in refunds under the settlement.

In an investigation of Realgy, Raoul’s office found telemarketing sales agents told consumers they would pay the best rate during a 24-month period because of Realgy’s “price-match” program, even though some Realgy customers paid more; that Realgy’s offer was a reward for the consumer’s status with the public utility; and Realgy was enrolling consumers in a program offered by their utility when no such program existed. The Attorney General also found Realgy’s door-to-door representatives routinely misrepresented that they were affiliated with the utility and signed up customers without their consent by forging their signatures. Current and former Realgy customers will receive just over $180,000 in refunds under the settlement.

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