Alternative electric supplier uses 'deceptive' practices, lawsuit claims

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An alternative energy supplier is accused of charging customers millions more than they would have paid under a regulated utility. (WLS)

An ABC7 I-Team Investigation
The Illinois attorney general is accusing one alternative electric supplier of "aggressive" and "deceptive" sales practices.

In a lawsuit filed this week, Attorney General Lisa Madigan accuses alternative power supplier Sperian Energy of "unlawful conduct" and charging customers millions more than they would have paid under a regulated utility.

The Illinois attorney general's office gave audio given to the I-Team which they say is a Sperian Energy sales call, but at first, the rep says she's calling from somewhere else.

"I'm calling on behalf of Consumer Utility Partners. At this time you could be receiving a rate reduction on the supply portion of your bill," the sales rep said on the recorded call. "The lowest supplier rate we have available is for 3 or 12 months fixed rate with Sperian Energy. To make the process easy for you, I just need you to grab a copy of your electric bill."

"Alright just a minute, I'll get the bill. Ok, I have the bill," the customer says on the call.

The customer did go through the state's required third-party verification, but the AG's office said it's an example of how consumers have been misled.

The AG also says Sperian Energy, with its main offices based in Houston, has charged customers $12 million more for electricity than a regulated utility would have since 2012.

In this lawsuit, Madigan said Sperian defrauded customers by enrolling them without their express consent and that sales reps didn't disclose the price, the length of the contract or even the identity of the company.

The suit also said people were enrolled under the "false impression" that they were signing up for discounted electricity from their public, regulated utility, like ComEd.

And if we listen to that recording from the AG's office again, the customer was told she was not leaving ComEd.

"They want to make sure you understand you are not leaving ComEd and if you would simply reply with them yes or no," the sales rep said on the call.

E-mails to the vice president of marketing at Sperian bounced back to us. Her voicemail was full. The I-Team also left a message with a Sperian sales rep and has not yet heard back.

Advice from Illinois Attorney General Lisa Madigan's office:

"Currently in Illinois, there are at least 96 alternative retail electric suppliers, or ARES, authorized to sell electricity in Illinois and data shows their customers are paying higher prices than customers with traditional utilities. According to the Illinois Commerce Commission (ICC), ARES customers in the ComEd territory as a whole have paid more than $152 million more for electricity than traditional utility customers from June 1, 2016 through May 31, 2017. Statewide, residential and small commercial customers enrolled with ARES have paid almost $400 million more in electricity costs in the last three years.

The Joint Committee on Administrative Rules (JCAR) is expected to rule in mid-September on new rules proposed by the ICC that would hold ARES more accountable for their business practices by requiring them to make additional disclosures to potential customers, use stronger enrollment verification processes and maintain recordings of telemarketing calls that result in a sale."

Madigan urged Illinois residents to research offers from ARES before switching electricity suppliers and offered the following advice:
* Do not share your utility account number with anyone in person or over the phone, and do not show your utility bill to someone who comes to your door. A marketer must ask for written authorization to access your meter usage.
* Request all marketing offers in writing and do not enroll on the spot, especially if someone comes to your door.
* If you are interested in an alternative pricing plan (such as a variable rate), make sure that you read all of the fine print and that the lower rate is not just an introductory rate.
* Be wary of any offer that promises or guarantees savings.

* Always ask about any monthly fees or additional charges.
* No alternative supplier is affiliated with or endorsed by your utility or the government. If you sign up for service with an alternative supplier, you are entering a new contract with a different company.

Madigan also offered the following tips to help decide whether to choose an alternative energy supplier:
* Check your utility bill to determine if you are purchasing natural gas or electricity from your utility company or an alternative supplier. Delivery will always be from your utility company.
* Find out how much you are paying. Find out what type of rate you have. If you are purchasing supply from an alternative supplier, check your contract to see what type of rate you are paying: introductory, variable, or fixed.
* Compare your rate. You can find utility and alternative supplier prices at:
* Electricity prices
* Natural gas prices
If you need to make a change, consider switching back to the utility company. You may be charged a fee up to a maximum of $50 for cancelling with the alternative supplier, but it may save you money in the long run.

Related Topics:
businessI-Teambusinesslisa madiganconsumer concernsIllinois
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