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Unfair and Deceptive Business Practices by REPs in the Energy Retail Industry

Energy deregulation has made it possible for consumers in deregulated markets to choose the company that supplies their energy. This approach has helped to keep the market price of energy low and affordable for consumers. It has also opened up an opportunity for many companies, typically known as retail energy providers (REPs), to offer energy supply services.

While the vast majority of REPs are upstanding, trustworthy companies, there are a few bad apples much like you’ll find in any industry.  These bad apples may have business practices that are dishonest or misleading, if not downright unethical and illegal.

Common Consumer Complaints

Most Public Utility Commissions across the United States publish reports on the complaints submitted by consumers in regards to their REP.  While unique situations can arise, the most common complaints across the board include:

Hidden Fees

In some cases, customers find that the contract they?ve signed for contains fees that they weren?t made aware of. For example, if they were late paying a bill, an exorbitant fee appeared on the subsequent bill. In other cases, when customers cancelled a contract early, similar hefty charges were applied.

Poor Customer Service

Customer service is such an important part of doing business in this day and age. When customers have problems with their energy bills or any other aspect of their service, they expect professional help. If a retail energy provider doesn?t respond to complaints or makes it very difficult to cancel a plan, it doesn?t leave the customer with a good impression.

Inconsistent Billing

Customers also like consistency. When they sign up for a plan and are told the details of that plan, they expect their bill and service to reflect that information. Unfortunately, due to unstable plans, unclear billing processes, and automatic switchovers in plans customer complaints in this area can run high.

Difficult to Understand

In many ways, having an easy to read energy bill, website and other marketing material is critical to the success of a retail energy supplier. The moment a customer starts to feel like they can?t understand what they?re paying for is a common problem. When a retail energy provider is unable to make their services clear or provide clear information, it in turn, makes a customer feel like they are being taken advantage of, or scammed in some way.

Telemarketers

In general, telemarketing is a direct sales tactic where a company will call their customers to try and increase sales. While this can be an effective tool for some, others actually end up annoying their customers for many reasons. The most common reason is that these retail energy supplier telemarketers call their customers much too often. When the customer requests to be excluded from the call list, which is absolutely within their right, the telemarketers continue to call.

Misleading Customers

This is probably the most serious complaint. There are retail energy suppliers out there who don?t tell the truth to their customers about exactly what they are signing for on their contract. In some cases, they don?t even give the consumer what they?re paying for. This type of problem is illegal and can often lead to class action lawsuits.

New Company ? Not Yet Established

This point could probably be classified as a ?con? rather than a complaint, however it is something that tends to make energy customers wary. When a retail energy supplier is recently established, they don?t yet have the proof to back up their claim that they provide legitimate services. Often, this is a tiebreaker for customers who make a choice between two companies.

Common Scams

If you are looking to switch retail energy providers, and even if you are not, it is important to be aware of companies who are looking for a quick way to gain your business. Even if it means you end up paying more when you were told you would be paying less. The following is a list of common scams that you might one day come across.

Door-to-Door Sales

Door-to-door salespeople who don?t have your best interests at heart will often claim that you are being charged way too much for energy. They will ask to see your energy bill and state that they can offer you much lower rates. This is often not true, and once they see your bill, they have you account number. They might also tell you that unless you choose an energy provider, your electricity will be disconnected. This is also a lie!

Sign Immediately

Whether a salesperson appears at your door, calls you on the phone, or gets you into their office ? the moment they begin to pressure you to sign something, chances are, you?re being scammed. Any salesperson worth their salt will understand the value of allowing the consumer to take their time in making a decision.

Slamming

Some companies get a hold of your account number and then sign you up to their services without your consent. This is a scam that you might not even be aware of ? unless you notice an increase on your bill.

Impersonation

A common scenario is for the energy retail provider to pretend that they are with your local utility. This happens especially with door-to-door or over the phone sales.

Some retail energy providers will also go as far as telling their potential clients that they are associated with the Public Utilities Commission within the state. This tactic tricks many people into believing that they are speaking with a government representative.

While we find it important to touch upon some common scams, understand that the frequency in which they occur are few and far between — especially when it comes to using the pre-screened REPs on ElectricChoice.com.

Reputable Energy Retail Providers

The following is a list of tips and tricks on how to find a reputable energy retail provider.

When dealing with an energy retail provider over the phone:

When dealing with a door-to-door energy retail provider:

A Few Questions to ask Potential Suppliers:

Where to File Complaints

Thanks to many laws and regulations surrounding energy deregulation, the applicable state governments are required to provide support in situations where retail energy supplier customers have complaints. Many also provide lists of registered suppliers, which helps to further weed out the companies who have questionable business practices.

The following list includes the name and link to the government office that will handle customer complaints in your state.

Government Entities that Regulate Energy Retail Providers By State

Connecticut – Public Utilities Regulatory Authority (PURA)
Delaware – Public Service Commission
Illinois – Commerce Commission
New Jersey – Board of Public Utilities
New York – Department of Public Service
New Hampshire – Public Utilities Commission
Maine – Public Utilities Commission
Maryland – Office of People’s Council
Massachusetts – Energy and Environmental Affairs
Michigan – Public Service Commission
Ohio – Public Utilities Commission
Oregon – Public Utility Commission
Pennsylvania – Public Utilities Commission
Texas – Public Utility Commission
Washington, DC – Public Service Commission

Ultimately, remember that the majority of REPs out there are reliable, hardworking, and honest companies.  And while the instance of deception or fraud is incredibly rare, it’s even less likely to occur with providers listed on ElectricChoice.com — we pre-screen our providers and only offer rates and plans from reputable companies.