Illinois AG Files Lawsuit Against Retail Energy Sales Agent, Suggests Rescission Of Supplier-Customer Contracts

Alleged Violations Include References By Sales Agents To Energy Choice "Program"

May 9, 2024

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Reporting by Paul Ring • ring@energychoicematters.com

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The Illinois Attorney General (AG) has filed a suit in Cook County, IL circuit court against Southeast Energy Consultants, LLC (SEC or Defendant), for alleged violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. (CFA), and the Illinois Telephone Solicitations Act, 815 ILCS 413/1 et seq. (TSA)

Southeast Energy Consultants, LLC provided EnergyChoiceMatters.com with the following statement concerning the matter:

"Southeast Energy has been in the deregulated energy industry for the last 15 years and takes any and all compliance measures very seriously. We are disappointed in the IAG’s recent suit and plan to vigorously defend ourselves against these allegations"

--- Statement from Southeast Energy Consultants, LLC provided to EnergyChoiceMatters.com

Among other relief, the AG seeks, "a permanent injunction barring Defendant from engaging in the sale of electric supply in or from the State of Illinois."

The AG further sought revocation of all licenses, charters, franchises, certificates, or other evidence of authority of Defendant to do business in the State of Illinois

The AG also asked for other relief that the Court finds necessary to redress injury to consumers, with the AG specifically suggesting, "rescission of contracts entered into between the Defendant and Illinois consumers," as well as the refund of monies paid, and the disgorgement of ill-gotten monies

The AG alleged that, for more than 10 years, SEC provided telemarketing services targeting Illinois consumers for one or more alternative retail electric suppliers (ARES) in Illinois

The AG alleged, "From at least October 2010 through December 2021, SEC contracted to provide telemarketing services for several ARES, including among others, Atlantic Home and Business, LLC; RPA Energy, Inc. d/b/a Green Choice Energy; Illinois Gas & Electric ('IG&E'); and Palmco Power, LLC d/b/a Indra Energy,"

As of publication time, the AG has not announced any actions against any of the retail supplier clients of SEC referenced in the suit

The AG alleged, "Among other practices, SEC marketed ARES’ services by claiming consumers would save money on their electric bills. As a result, Illinois residents were often defrauded into purchasing high-cost electricity supply service."

The AG alleged that, "SEC agents promised a guaranteed rate reduction or savings on the consumers’ electricity rates through ComEd or Ameren," when no such guaranteed or savings existed

As an example, the AG alleged, "An SEC agent, calling on behalf of Atlantic Energy, asked a consumer, Hugh, 'you don’t want to save money on your electric bill' when the consumer became uninterested in the call. The consumer remained on the line, and the SEC agent offered him a rate of 9 cents per kilowatt hour for 24 months. ComEd’s rate during the time of SEC’s offer was less than 8.3 cents per kilowatt hour."

In another example, the AG alleged that an SEC agent, "calling on behalf of RPA Energy told a consumer that they only reason RPA couldn’t guarantee savings is because a consumer might have a massive increase in usage in a given month, but that otherwise the consumer would save money by switching to RPA Energy. This was false. The RPA Energy rate, 11.59 cents per kWh, was higher than ComEd’s rate at the time."

In another example, the AG alleged an SEC agent, "calling on behalf of Indra Energy invited a consumer to switch from Ameren to get a 'price protected rate.' When the consumer asked if it would help save money, [SEC's agent], said, 'This will get you . . . yes. This will help you avoid any increases on the electric bill.' This was false. The new 'price protected' rate was higher than the applicable Ameren rate. Even worse, the Indra agent never disclosed the new 'price protected' rate to the consumer. "

The AG alleged, "SEC also made numerous false, deceptive, and misleading statements that led consumers to believe that its agents were affiliated with the default public utility company, and that the agents were calling to enroll them in an official state-sponsored program that would provide some cost-saving benefit."

The AG alleged as an example, "in 2019, SEC agents, on behalf of IG&E, routinely misrepresented an affiliation with the utility by telling consumers they were entitled to a refund check on their electricity bill -- referring to the consumer’s ComEd or Ameren bill."

The AG alleged, "SEC also misrepresented an affiliation with the utility companies by referring to a non-existent 'postcard,' 'insert,' or 'message' included in the consumer’s utility bill that promised a rate reduction. Consumers regularly told SEC sales agents that they had never seen the referenced postcard, insert, or message. SEC trained its sales agents to respond by stating that many consumers had missed the insert or message."

Notably, the AG alleged that mere references to a state or utility energy choice "program" were deceptive

The AG said, "Nothing in Illinois law entitles consumers to reductions on their electricity bills. While the deregulation of the utility market in 1997 allows Illinois consumers to choose their electric supplier, there is no state or energy 'program.' 220 ILCS 5/16-101 et seq."

The AG alleged that the following examples illustrate SEC agents' alleged "misrepresentations about an ARES’s affiliation with a governmental body":

a. An SEC sales agent calling on behalf of Atlantic Energy told a consumer that 'utilities in Illinois had put together the ‘state’s choice’ program for the consumer’s benefit.' Continuing, the agent said that she was calling to 'facilitate' enrollment in the program, which was available to 'ComEd and its consumers.'

b. An SEC sales agent calling on behalf of Atlantic Energy promised a consumer that she would 'save money' in the 'energy choice' program.

c. Another SEC agent informed the consumer, 'Right now your state has an energy choice program going on, and they are trying to get you to pick a supplier on your bill. . . .'

The AG alleged, "SEC explicitly stated or implicitly conveyed it was affiliated with ComEd, Ameren, and a state-sponsored electricity program to lure consumers into trusting its sales pitch and switching to an ARES. SEC agents falsely represented an affiliation with the utility when they told consumers they were calling to follow up on a non-existent 'insert,' 'postcard' or 'message' included in the consumer’s electricity bill that explained their eligibility for a money saving program."

The AG said that the TSA requires telemarketers to "state the purpose of the call" and to "inquire at the beginning of the call whether the person called consents to the solicitation." 815 ILCS 413/15(b)(1)-(2).

The AG alleged, "SEC knowingly and intentionally made calls to consumers without stating the purpose of the call and requesting consent to continue with the solicitation. Indeed, it directed its sales agents to make illegal phone calls by providing them scripts that did not explain to consumers the purpose of the call or request consumer consent to continue with the solicitation."

The AG alleged instances in which an SEC agent did not request consent to continue, and in which the SEC agent obfuscated the purpose of the call by stating that the agent was, "[j]ust following up on a postcard that was sent out to you regarding a refund check you are now entitled to receive on your electric bill."

The AG alleged an instance in which the SEC agent then admitted that they would be staying on the line during the third-party verification in violation of 815 ILCS 505/2EE(B)

The AG's suit does not cite a specific total amount sought under civil penalties, but, among other additional penalties, seeks $50,000 per relevant violation

"Thousands of Illinoisans were contacted by SEC with promises of lower electricity rates and overall cost savings on their energy bills. In reality, consumers ended up paying more in energy costs than if they had stayed with their public utility company," said Illinois Attorney General Kwame Raoul. "My office is committed to protecting Illinois consumers from deceptive practices utilized by alternative retail electric suppliers and their vendors, and preventing consumers from overpaying for the energy they need."

The suit is 2024CH04292, Cook County Circuit Court

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