ATTORNEY GENERAL TONG, CONSUMER COUNSEL KATZ APPLAUD FINAL DECISION THAT IMPOSES $1.5M FINE, PENALTIES ON DIRECT ENERGY ELECTRIC SUPPLIER
Attorney General William Tong and Consumer Counsel Elin Swanson Katz praised a final decision issued today by the Public Utilities Regulatory Authority to fine third-party electric supplier Direct Energy $1.5 million for violating Connecticut statues by employing misleading sales and marketing practices.
The $1.5 million fine is the largest PURA has ever imposed on an electric supplier. Under the final decision, Direct Energy is prohibited from enrolling new customers, except by online enrollment, for six months and requires the energy supplier to undergo a compliance audit for another year after that.
Both the Office of the Attorney General and Office of Consumer Counsel were participants in the PURA proceedings and advocated for aggressive sanctions.
"As the state's largest electricity supplier, Direct Energy repeatedly employed deceptive tactics that harmed Connecticut consumers and their checkbooks. Connecticut residents are already burdened by high electric rates; they do not need to be misled into paying more. I applaud PURA for its aggressive action to protect Connecticut consumers from these bad actors and for showing that manipulative sales and marketing practices are not tolerated in our state or our third-party electric market," said Attorney General Tong.
“For years, Direct Energy engaged in a deliberate pattern of openly disregarding Connecticut law, and made millions of dollars while deceiving consumers in order to bolster its own sales. Today’s decision sends an incontrovertible message to all electric suppliers: comply with Connecticut law or face substantial penalties. Direct Energy’s consistently unrepentant attitude when faced with its own consumer abuses over the course of this investigation demonstrates why PURA’s robust civil penalty and other relief are warranted. I applaud PURA for undertaking a thorough investigation, crafting an exhaustive decision, and vindicating the many consumers who have fallen prey to Direct Energy’s unfair and unscrupulous trade practices,” said Consumer Counsel Katz.
PURA's investigation found the following violations of Connecticut statute by Direct Energy:
1) Not having Spanish marketing materials available when conducting solicitations and sales;
2) Not having Spanish-language contracts available when conducting solicitations and sales, resulting in invalid contracts;
3) Misstating standard service price;
4) Not stating in its marketing that it did not represent an electric distribution company (EDC);
5) Not explaining the purpose of its solicitations;
6) Misrepresenting cancellation fees;
7) Using undefined terms and not accurately explaining rates;
8) Implying customers must choose a supplier;
9) Misleading customers into believing generation charges were the total bill;
10) Coaching customers and answering questions through the third-party verification (TPV) process;
11) Charging excessive cancellation fees;
12) Not directly training its third-party agents; and
13) Engaging in other unfair and deceptive marketing practices, including but not limited to, making misleading statements in its marketing.
Assistant Attorney General John S. Wright and Consumer Protection Department Head Mike Wertheimer assisted the Attorney General with this matter. Attorney Lauren Bidra, Attorney Andrew Minikowski, and Economist John Viglione assisted the Consumer Counsel with this matter.
Office of the Attorney General
Office of the Consumer Counsel