AG Madigan files lawsuit accusing alternative electric supplier of misleading customers

An ABC7 I-Team Investigation

ByJason Knowles and Ann Pistone WLS logo
Monday, April 9, 2018
AG Madigan files lawsuit against alternative electric supplier
Attorney General Lisa Madigan alleges Major Energy's contracts are "costly" and confusing, and the supplier uses high pressure sales tactics to seal the deal.

CHICAGO (WLS) -- There are allegations that an alternative electric supplier misled thousands of Illinois customers. The I-Team has been covering complaints against alternative suppliers for years.

Attorney General Lisa Madigan filed a lawsuit Monday against one alternative electric supplier. She said the company's contracts are "costly" and confusing, and the supplier uses high pressure sales tactics to seal the deal.

SALES REP: Today, by allowing ComEd to access major energy resources, you will receive an immediate rate reduction.

CUSTOMER: What do you mean by allowing ComEd to access major resources?

The attorney general's office says that is a sales rep from Major Energy asking a local consumer for his ComEd account number, so he can be switched to the alternative electric supplier based out of New York State.

LISTEN: Audio from Major Energy sales call

"They use misleading, deceptive and fraudulent claims to sign up and then scam consumers into paying much more money than they need to for their electricity," Madigan said.

Madigan filed a lawsuit Monday against Major Energy accusing the company of "deceptive "sales tactics, also saying that sometimes consumers gave up their regulated, ComEd account numbers without knowing they had been sold an unregulated plan.

"Major Energy claims they will save people money on their electricity bill, when in reality 98 percent of prices billed to Major's customers were higher than if they would have stayed with their traditional regulated utility," Madigan said.

Madigan said Major Energy has enrolled a total of 11,509 customers since April 2012, but has only 3,488 active Illinois accounts as of January 2018. In the lawsuit, Madigan is asking for full restitution of almost $2.5 million to consumers who were affected and she's trying to get major energy's license revoked in Illinois.

The Better Business Bureau gives the company a "B+" but also issued an alert saying the company has misrepresented itself as a BBB-accredited business on its website and marketing materials.

"We've received 79 complaints against them for a variety of issues, most of them alleging promising savings on utilities by their representatives and some of those bills doubled," said Steve Bernas, Better Business Bureau.

Major Energy said it's "not able to comment on pending or ongoing litigation."

In August 2014, the company told the I-Team "...Major Energy denies any wrongdoing and will vigorously defend ourselves against any and all allegations..." That was in response to the I-Team uncovering consumer complaints filed against the company with the Illinois Commerce Commission and the Citizens Utility Board.

On Monday, Madigan said that residential and small commercial customers using alternative plans have paid more than $400 million than they should have in the last three years - and she's backing legislation to improve the industry.

If you're looking into buying an unregulated plan you should make sure you know the contract inside and out. You should make sure a cheap rate at the beginning won't end up skyrocketing later with a variable rate.

Last week, the I-Team told you about new proposed legislation that would ban automatic renewals on contracts without specific consumer consent. It would also require alternative suppliers to send a separate bill with their logo - instead of billing through the regulated provider, which delivers the energy.

An industry spokesperson representing alternative suppliers said the latest legislation is unworkable, and that upcoming state regulations which go into effect on May 1 should be enough to police the few bad apples in the industry.