Retail Supplier To Pay $500,000 Under Settlement, Agrees To Not Compensate Agents/Vendors Based Only On Sales Volumes; Marketing Stay-Out Imposed

In a news release, Illinois Attorney General (AG) Kwame Raoul announced a $500,000 settlement with Rushmore Energy, "that resolves allegations the alternative retail electric supplier (ARES) engaged in fraudulent, unfair and deceptive business practices to mislead Illinois consumers into paying more for electricity than consumers who stayed with their default public utility," the AG's office said

Per the AG's office, a consent order will require Rushmore Energy to pay restitution to eligible Illinois customers who received at least 30 days of residential electricity supply service from Rushmore Energy between Jan. 1, 2020 and Dec. 31, 2024.

Of the $500,000 settlement, about $400,000 will be paid into a fund to pay the restitution to customers. Settlement administration fees will be deducted from this $400,000

The restitution amounts to customers will largely be based upon eligible customers’ electricity usage during the relevant period, the AG"s office said

“Companies like Rushmore Energy must be held accountable for taking advantage of consumers with misrepresentations and false promises of lower prices,” Raoul said. “My office is committed to protecting Illinois residents from such deceptive practices and preventing people from being misled into overpaying for the energy they need.”

The settlement prevents Rushmore Energy from engaging in residential marketing activities and enrolling new residential customers in Illinois until December 31, 2028, provided that the company makes all required payments under the settlement agreement by such date. If payment has not been made by such date, the marketing and new enrollment prohibition extends until Dec. 15, 2029

The marketing and enrollment prohibition does not apply to non-residential customers

The residential marketing prohibition does not prevent customer renewals nor the issuance of renewal notices required by rule

Among other things, the AG had alleged that Rushmore, or its third-party vendors, omitted key disclosures during telephone solicitations, and failed to obtain the consumers’ consent for the solicitation at the beginning of the call, in violation of Section 15 of the Illinois Telephone Solicitations Act

The AG alleged that Rushmore, through its third-party vendors, made "misrepresentations" to consumers that Rushmore rates were “low” and would save consumers money

The AG alleged that from August 2019 through November 2022, Rushmore customers collectively paid more than if they had stayed with their public utility for supply.

The AG alleged that Rushmore, through its third-party vendors, "repeatedly misrepresented" to Illinois consumers an affiliation with Ameren and ComEd.

Rushmore expressly denies all of the allegations from the AG

With regards to the practices and prohibitions that Rushmore agrees to as part of the consent decree described below, any reference to a "Consumer" or "consumer" means residential consumers in Illinois, and does not apply to other customers. "Marketing Activities" specifically means residential marketing in Illinois

Among other things, the consent order provides that Rushmore will not, as described by the AG, "misrepresent" a "price protection" through a state or utility "program."

More specifically, the consent order provides that Rushmore may not use the phrases “utility choice program,” “state choice program,” or “Illinois Choice Program” as it relates to Illinois’ deregulation law. Rushmore may, however, accurately state that Illinois state law allows Consumers to choose an alternative retail electric supplier for their supply of residential power.

During a telemarketing or in-person solicitation, Rushmore may not ask a Consumer to provide their utility account number before Rushmore discloses all material terms and the Consumer affirmatively consents to enroll with Rushmore

Upon the resumption of marketing, Rushmore agrees that, during the solicitation, Rushmore will provide, among other things, "The current default public utility rate for electricity or gas supply".

Additionally, if Rushmore resumes Marketing Activities and offers Consumers a fixed-rate product, then it shall charge the Consumer the same fixed rate for at least six months without increasing the rate

The consent decree provides that, if Rushmore resumes Marketing Activities to residential customers, it shall not pay its employees based only on the volume of sales made by those employees. Rushmore shall not contract with any subcontractor or vendor to engage in residential Marketing Activities that pays its employees based only on the volume of sales made by those employees

The AG's office said, "Raoul’s office has recovered over $25 million through litigation related to ARES’ fraudulent and unfair business practices that deceived Illinois customers into paying millions of dollars more for electricity than consumers who stayed with their default public utilities."