Attorney General Sues Retail Supplier, Seeking "Shut Down"

Seeks $77 Million In Customer Restitution, License Revocation

Suit Relies On "Explosive" Audio Recordings Of Sales Practices

February 19, 2020

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Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Illinois Attorney General (AG) Kwame Raoul filed a lawsuit against Liberty Power Holdings LLC (Liberty), with the AG's office stating in a news release that the suit, "seeks to shut down Liberty for deceiving tens of thousands of Illinois residents into signing contracts based on false promises that Liberty would save them money on their electricity bills."

Among the relief sought by the court is a request that the court, "Revoke Defendant’s Certificate of Service Authority to operate as an alternative retail electric supplier in the State of Illinois[.]"

A Liberty Power spokesperson provided the following statement concerning the suit

"Liberty Power only recently became aware of the filed complaint and was never afforded an opportunity by the Attorney General’s Office to educate them about the company’s products and program or to respond to the allegations prior to the court filing. Liberty Power strongly denies the AGO’s allegations which unfortunately will now have to be addressed in a court proceeding without the opportunity to engage in appropriate pre-filing discussion or engagement. Liberty Power takes both the quality of our program and these allegations very seriously. The company remains committed to an excellent customer experience, including full compliance with applicable laws and regulations, and quick resolution of any issue of customer dissatisfaction."

--- Liberty Power spokesperson

As stated by the AG's office in a news release, Raoul’s lawsuit, filed in Cook County (IL) Circuit Court, "alleges that Liberty’s sales representatives promise to save consumers money and protect them from rate increases when in fact, customers pay significantly more for their electricity after being switched to Liberty."

Raoul alleges Liberty Power’s sales representatives give residents the false impression they are signing up for a discounted rate from ComEd or Ameren, or taking advantage of a government program. Instead, customers are switched over to Liberty, which Raoul alleges charges them much more.

Raoul alleges that, since 2012, Liberty’s customers have paid in excess of $77 million more than if they had remained with the utility (typically, ComEd or Ameren).

The AG alleged, "Since 2016, Liberty has overcharged Illinois consumers by an average of over $1 million per month. During that same period, Liberty’s rates—rates that Liberty promises are 'low,' will provide 'price protection,' and will result in 'savings' -- have been higher than the comparable utility’s rate over 99% of the time."

The AG's suit cites "explosive audio recordings" of Liberty’s sales interactions in alleging various behavior.

The AG's office in a news release alleged that, "Liberty’s sales agents intentionally deceive customers by pretending to represent customers’ utility companies, lying to customers about what they are currently paying for electricity, and even forging customers’ signatures on contracts."

The AG alleged, "Liberty also tells consumers that the utility rate is about to increase when, in fact, the utility rate is scheduled to stay the same or even decrease."

The AG alleged, "Liberty tells consumers their rate can change 'at any time.' But, in fact, if a consumer is currently receiving electricity supply from the utility, their rate is determined and publicly available months in advance and will change, at most, once every 3 months, excluding a small monthly purchased electricity adjustment that is capped at one half of one cent. It can, and often does, remain the same for 6 months at a time. It cannot change 'at any time.' If a consumer is currently with another ARES, they may be on a fixed rate for a year or more, or they may be on a variable rate that changes every month. But one thing is clear: Liberty has no way of knowing, as it purports to know, how frequently a consumer’s rate will change -- or even if it will change."

The AG alleged, "Liberty’s sales representatives can be heard on audio recordings of third-party verifications."

The AG said that the Telephone Solicitations Act, 815 ILCS 413/15, requires telemarketers to 'immediately state his or her name, the name of the business or organization being represented, and the purpose of the call.'

The AG alleged that, "Liberty’s telemarketing sales agents fail to immediately state they represent Liberty."

The AG said that the Telephone Solicitations Act, 815 ILCS 413/15, prohibits telemarketers from soliciting without first asking the person called whether they consent to the solicitation. If the person called does not consent, the telemarketer must end the call.

The AG alleged that, "Liberty’s telemarketing sales agents solicit customers without inquiring at the beginning of the call whether the person called consents to the solicitation."

The AG alleged that the following were recorded solicitations conducted by a representative of Liberty

The AG alleged, "A recorded in-person solicitation from December 2019 begins with the consumer, Ms. B., asking if the Liberty sales agents are trying to switch her supplier: 'But they’re not trying to switch my stuff (indiscernible)?' The Liberty sales agent lies: 'No, no, no. You stay with ComEd. It’s all one bill. We’re just giving out price protection.' ... The Liberty sales agent tells Ms. B. she is 'going to be protected at a rate of 0.0999 cents [sic, see note* below] per kilowatt.' Ms. B. is confused: 'Now, what am I protecting though?' Liberty lies to Ms. B. about ComEd’s rates: ComEd 'always raise[s] their rates on you in the winter and summer because they know that you use more electricity.' Liberty then suggests that Ms. B. can avoid ComEd’s alleged seasonal price increases, lock in her current rate, and save money, by enrolling in 'price protection': 'So we’re just making sure that your rate is going to stay at that same rate.' Ms. B. could have paid only 6.72 cents per kilowatt hour with ComEd rather than 9.99 cents per kilowatt hour with Liberty."

* The AG alleged that, "Liberty routinely misstates its own rates." In the alleged complaint above, the AG alleged, "Here, the rate is 0.0999 dollars, or 9.99 cents, per kilowatt hour—not 0.0999 cents per kilowatt hour. Excerpts from Liberty solicitations are uncorrected throughout this Complaint."

The AG alleged, "On a recorded in-person solicitation from November or December 2019, Mr. D. asks, 'Well, are you change – are you changing my supplier?' The Liberty sales agent lies: 'No.' Liberty enrolls Mr. D. at a fixed rate of 9.99 cents per kilowatt hour for the next two years. Mr. D. could have paid only 6.72 cents per kilowatt hour with ComEd."

The AG alleged, "On a recorded in-person solicitation from November 2019, a Liberty sales agent tells Mr. D. that she is enrolling him in a 'rate protection program' where he will 'receive a guaranteed rate of 0.0999 kilowatts per hour.' Although she is switching his supplier, the Liberty sales agent lies to Mr. D. by telling him that his relationship with ComEd will not change: 'But, you know, Liberty Power does not affect the relationship with the utility in any way.'"

The AG alleged, "Liberty pitches another consumer: 'We’re just making sure everybody has that protected rate for this year before the winter….and so the rates don’t increase. And it’s a free program for Ameren’s customers... And it stabilizes your rate for two years.'"

The AG alleged, "On an undated recorded in-person solicitation, an agent 'with Liberty Power' misrepresents to Ms. V. that he is merely 'updat[ing]' her account. 'So you get protected for two years at .1066 cents a kilowatt,' the agent tells Ms. V. 'So what am I signing up for?' she asks. The agent tells her that she’s not signing up for anything, but instead he’s just updating her account: 'Oh, no. You’re just an agreement—because basically your account wasn’t updated. You don’t have the protected rate. So basically now your rates are going to be protected for two years; so no matter where the rates go, yours won’t go up.'"

The AG alleged, "Ms. H. complained to the Better Business Bureau in June 2019 that a Liberty door-to-door sales agent slammed her. The agent 'bullied' her underage child 'to lie and say he was 18' in order to 'agree' to switch electric suppliers. When Ms. H returned home, she saw the Liberty agent in her neighborhood, and the agent 'proceeded to lie to [her] over and over.' The agent had forged Ms. H.’s signature and enrolled her without her consent."

The suit alleges dozens of similar interactions, quoting from alleged recordings

"Liberty Power has defrauded consumers across Illinois. Worst of all, sales representatives focus their efforts on the elderly and people with disabilities," Raoul alleged. "My office is committed to protecting all Illinois consumers from energy scams, and Liberty’s conduct is particularly egregious. Companies like Liberty have no business operating in Illinois at the expense of our most vulnerable residents."

The Attorney General’s lawsuit stems from an investigation of thousands of recorded sales pitches, delivered mainly through telemarketing calls, door-to-door sales, and in-store kiosks at retailers such as Walmart.

Raoul’s office is asking the court to provide full restitution of more than $77 million to allegedly defrauded consumers and to revoke Liberty Power’s license to do business in the state of Illinois.

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