BOSTON – Viridian Energy, LLC, a competitive electricity supplier in Massachusetts, has agreed to pay $5 million to settle allegations of deceptive marketing and sales tactics that lured residents into costly contracts with high electricity rates, Attorney General Maura Healey announced today, March 28.
In an assurance of discontinuance, filed in Suffolk Superior Court on Friday, the AG’s Office alleges that Viridian Energy, through door-to-door sales, direct mail, and family-and-friend-based “network marketing” engaged in various deceptive and unfair sales tactics.
The AG’s Office also alleges that consumers who switched to Viridian ultimately paid more for electricity than if they had stayed with their utility.
“This company sent salespeople to go door-to-door and trick residents into paying much more for their electricity,” AG Healey said. “Our settlement requires Viridian to pay back millions of dollars they owe customers for their deceptive tactics and false promises. We will continue to go after competitive electricity suppliers who violate our laws.”
According to the settlement, Viridian contracted with independent sales agents and instructed them to tell potential customers, including friends and family members, that signing up with the company would save them money over time. In fact, customers paid more than they would have if they had remained with their electric utility company’s basic service.
The AG’s Office also alleges that a third-party marketer hired by Viridian to market and sell its electricity supply door-to-door engaged in widespread misconduct, including falsely promising savings, falsely representing an affiliation with the customer’s utility company, switching customers to Viridian without authorization, and other aggressive marketing tactics.
Under the terms of the settlement, Viridian will pay a total of $5 million, including $4.6 million to provide restitution to affected customers. The remainder of the payment will go toward: offsetting the cost of the office’s investigation of Viridian; creating a new fund for future enforcement cases the office brings against competitive electric suppliers; and the state’s General Fund.
Viridian also has agreed not to market its electricity supply door-to-door in Massachusetts for the next two years, in addition to making several other changes to its marketing practices.
The AG’s Office has received hundreds of residential consumer complaints concerning the unfair and deceptive conduct of competitive electricity supply companies. AG Healey offers the following tips for residential consumers:
- Check bills: Consumers should check to make sure that they have not been switched to Viridian or any other supplier without their consent. Consumers still receive bills from their local electric company even if they have been switched to a competitive supplier. Consumers can find out whether they have been switched to a competitive supplier by seeing if the name of a supplier appears in the “supply charges” or “generation charges” portion of their bill.
- Protect personal information: Consumers should treat their electricity account number like their credit card information. An agent has the ability to switch you without your consent if this person gets your name and account number from your electricity bill.
- Be cautious of sales tactics: Consumers should be aware that their electric company will not send representatives to consumers’ doors or call them on the phone to talk about electricity supply rates. If a representative contacts consumers about their electricity supply rates, this person most likely works for a competitive supplier.
- Know your rights: Consumers should not let door-to-door sales persons into their home unless the consumer knows them personally. Consumers should contact local law enforcement authorities if the sales agent refuses to leave or the consumer believes that the sales agent poses a threat to the safety of the consumer or others.
The AG’s Office has returned millions of dollars to Massachusetts customers through its previous actions against competitive energy supplies.
Any consumer or retailer with concerns about these deceptive marketing practices should file a complaint with the AG’s Office or call the consumer hotline at (617) 727-8400. Consumers with questions can also contact the Consumer Division of the Department of Public Utilities at (877) 886-5066.
Viridian cooperated with the Attorney General’s investigation.
This case is being handled by Deputy Division Chief Nathan Forster, Assistant Attorney General Joseph Dorfler, Investigator Kristen Salera, and Division Chief Rebecca Tepper and all of AG Healey’s Energy & Telecommunications Division, along with Energy and Environment Bureau Chief Melissa Hoffer.
Press release courtesy of the Massachusetts Attorney General’s office