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Retail Supplier To Pay $4 Million Under Settlement With State Attorney General To Address Marketing, Pricing Allegations

January 6, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Just Energy has entered into a settlement with the Massachusetts Attorney General under which it will pay $4 million to address allegations that the supplier or its agents engaged in, "deceptive marketing and sales that promised savings but charged significantly higher rates, entered consumers into agreements without their consent, and charged costly termination fees."

The AG alleged that Just Energy, through a third-party telemarketing vendor and door-to-door agents, engaged in deceptive marketing and sales that misled consumers into signing contracts based on attractive introductory pricing, only to later increase their electricity supply costs.

The AG's Office said that, according to the settlement, "Just Energy sales representatives allegedly failed to disclose complete and accurate pricing information to its customers by promising savings or representing that they could help consumers keep their electricity bills low. Instead, consumers were charged rates that were higher than the rates for the electricity supply provided by NSTAR and National Grid."

The AG also alleged that Just Energy, "induced elderly and non-native English speaking consumers by continuing to offer electricity supply services even after it became clear that they did not understand the terms of the proposed contract."

Other allegations from the AG included that, "[c]onsumers were allegedly switched from their distribution company to Just Energy without their authorization. Termination fees worth tens of thousands of dollars were allegedly charged to small business owners, even though they were never previously advised of the charges."

The AG's Office alleged that Just Energy represented its products were offered as part of a state-run program and also alleged that the company misled consumers about their affiliation with the customer's utility company.

Under the terms of the settlement, Just Energy will pay a total of $4 million, including $3.8 million to an independent trust fund for purposes of making payments of restitution to certain consumers, and $200,000 to the Commonwealth. Just Energy cooperated with the Attorney General's investigation.

Just Energy has also agreed to waive all early termination fees for all residential customers on variable rate contracts, except those that are on introductory rates at the time of early termination.

Just Energy has also agreed not to enroll low-income customers unless it guarantees savings to those customers, and will engage an independent monitor to ensure compliance and appropriate door-to-door sales operations in Massachusetts.

The AG's Office said that it has received more than 100 consumer complaints concerning Just Energy's conduct.

Just Energy provided the following statement to EnergyChoiceMatters.com:

"This settlement is in no way an admission of any wrongdoing on behalf of Just Energy. Just Energy has chosen to settle the matter with the Massachusetts Attorney General in order to focus on continuing to provide Massachusetts consumers and the rest of the country innovative products that provide price stability and value. None of these allegations, which date back to 2011, have been proven. The new management team decided it was in the best interest of the organization to simply settle these matters, move forward, and focus on building the business."

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