Massachusetts Attorney General Files Lawsuit Against Retail Supplier
October 17, 2018 Email This Story Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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The Massachusetts Attorney General (AG) has filed a lawsuit in state court against Starion Energy, Inc., alleging various "unfair or deceptive act" were committed in the selling of electricity
The suit also named as defendants two of Starion's principals and several telemarketing firms.
In a statement to EnergyChoiceMatters.com, Starion Energy stated, "Starion’s policy is not to comment substantively on active litigation matters. The company adamantly disputes the allegations in the AGO’s lawsuit and intends to defend itself vigorously. Starion welcomes a full and fair opportunity to present its case and will demonstrate that the AGO’s claims are without merit."
In a news release, the AG's office stated that the complaint, "alleges that the parties violated the state’s consumer protection laws by engaging in unfair sales tactics including unsolicited telemarketing calls and pre-recorded robocalls that deceived Massachusetts customers by falsely promising them lower electricity rates while signing them up for expensive contracts that ultimately made them pay millions more on their bills."
"We allege Starion Energy extorted millions of dollars from Massachusetts customers by falsely promising them big savings on their electricity bills, while overcharging them month after month," Massachusetts Attorney General Maura Healey said.
"Even with our strong consumer protection laws in Massachusetts, Starion and many other competitive electric supply companies continue to deceive thousands of Massachusetts families," said National Consumer Law Center Attorney Jenifer Bosco.
The AG's office alleged in a news release that, "Starion signed up more than 130,000 Massachusetts customers, who ultimately paid tens of millions more on electricity than they would have if they had stayed with their utility company."
The AG's office alleged in a news release that, "Starion’s telemarketing entities knowingly violated the law by making calls to consumers on the state’s Do Not Call Registry and masking identity of the caller and the geographic location of the call."
The AG's office alleged in a news release that, "Starion’s telemarketing and pre-recorded robocall scripts used deceptive and misleading information including that 'most consumers are overpaying on their energy bills by hundreds of dollars each year' and that new laws that have been passed in the area give consumers 'the right to receive a lower rate on [their] current electric bill.'"
The suit cites pricing under the Starion Simple plan, a variable rate plan, which the suit alleges includes an "ongoing rate" after an introductory promotional rate
The suit alleges that, during the extreme cold of early 2014, Starion charged Starion Simple customers in its east coast states and D.C. 21.97¢/kWh starting in February of 2014.
The suit alleges that the "ongoing rate" for Starion Simple customers, after an introductory period, who were enrolled as of February of 2015 was 21.47¢/kWh, which the suit alleged, "stayed fixed for months."
The suit alleges, "For every month in the nearly four years since Starion began marketing to residential customers, Starion's ongoing rate has been higher than the fixed basic service rates available through those customers' distribution companies."
The suit alleged that the alleged marketing of the lower introductory rate followed by the pricing above constituted a, "bait and switch."
The suit alleges that, "Starion's terms of service regarding price are themselves misleading because they represent that Starion's variable pricing is based on 'market-related factors.' Starion's monthly variable rates do not reflect market conditions and often increase when the wholesale cost of electricity decreases."
However, the quoted terms of service in the suit also states that, in addition to "market-related factors," the price shall reflect, "...Starion's costs, expenses and margins."
The suit alleges Starion's sales script did not disclose that references to a "rate reduction" and any resulting savings was part of a "promotional" or "introductory" rate that would expire after only one or two months.
The suit alleges that Starion's sales script also failed to disclose that the customer would be charged a monthly "account management fee" of $6.72 or $9.97 in addition to the rates that customers paid to Starion.
The suit alleges that, "When Starion filed for its application for a license to market and sell electricity in Massachusetts, it provided the Department of Public Utilities with a different script that had additional disclosures. Starion, in fact, never used the script that it provided to the Department of Public Utilities to market and sell to Massachusetts customers."
The suit alleges that agents of telemarketing firms allegedly engaged by Starion, "misrepresented that they were calling from the customer's electric distribution company and/or that they were calling in connection with a state or distribution company 'program' to save customers money."
The suit alleges, "For example, the Telemarketing Defendants often represented that they were 'calling in regards to the National Grid bill' and failed to disclose that the agents were in fact calling on behalf of Starion."
The suit alleges that robocalls used to market Starion, "violated 940 C.M.R. 19.04 by falsely representing in robocalls that a new law gave consumers the right to receive a 'reduction' on their energy bills, that Starion's services were somehow the result of the American Recovery and Reinvestment Act, and that Starion's services were a part of a fake federal government program."
The AG’s Office’s complaint seeks civil penalties per violation and restitution to customers
The case, filed in Suffolk County Superior Court, is 1884CV03199 Commonwealth of Massachusetts vs. Starion Energy Inc et al