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Personal Finance

Energy Sales Scams

Energy market de-regulation

In Ontario the energy market (natural gas, electricity) was de-regulated a few years ago to introduce competition in the energy marketplace. This has created a lot of problems because the energy resellers use door-to-door salespeople to sell the contracts and many of them seem to be crooks.

The problem

The biggest danger from door-to-door salespersons of any kind is that if they knock on enough doors they will find people who are vulnerable to making a hasty decision – old people, mothers with a young child or two, someone who is sick. All these groups are people who might normally be able to see through the lies of an energy market reseller but sometimes fall prey and sign a contract that they either don’t want or don’t understand.

My experience

Two summers ago I was relaxing on our back deck when someone knocked on our door. It was quite a loud knock and I originally thought it was one of the neighbours who was making some noise. I ignored the noise and kept enjoying the fact that my new little baby was asleep. Then I heard the knock again – this time even louder. Still I didn’t move – until the third set of knocks and I heard my wife who had been sleeping in the front room with our two week old baby, talking to someone at the door. It was only then that I realized someone had been knocking on our door – immediately I was quite annoyed that someone would keep knocking even though we weren’t answering the door.

The trap

Since I knew my wife was in even more of a sleep-deprived zombie state than I was, I quickly went into the house and talked to the person at the door. The man seemed normal enough and had his two kids with him – probably around 10 years old. He asked me if I had received my “discount” on my natural gas bill yet? I said no since I had not heard of any sort of discount. He then asked me to go and get an old gas bill and he would make sure I would get the discount. Now at this point, anybody who has any sort of intelligence would probably start to smell a rat – but given the fact that I was extremely tired and overwhelmed by the new baby – didn’t suspect a thing. While the “suspicious” part of my brain was taking a rare nap, the “greed” brain portion was wide awake and prompted me to listen to the guy and go an find an old gas bill. When I couldn’t find one I returned to the door and asked the guy if I could still get the discount without an old bill. I asked him if he could look up the account number at his office since I thought he worked for my natural gas provider. He said it shouldn’t be a problem and asked me to sign a document he had on a clipboard. On top of the clipboard I noticed quite a few gas bills that he had obtained from my neighbours for their “discount”.

The awakening

I took a look at the paper (I wasn’t completely brain dead) and noticed right away that it was a contract where if I signed I would be agreeing to a fixed rate natural gas delivery for three years. At that point I knew exactly who and what he was and and that he was trying to rip me off. I told him that this was not a discount but a contract for gas delivery. He said no – it’s for a discount on your gas bill and then showed me a table that indicated that his company’s gas charges had been lower (supposedly) then my provider. I even asked him what company he worked for and he wouldn’t say.

The punishment

Had he not had his two kids with him, I think I would have been quite tempted to literally throw him off my porch since I was quite annoyed by then. I was angry at him for waking up my sleeping family and trying to rip me off. I was also a bit angry at myself for almost letting him get away with it. I did tell him what I thought of him and his lies and told him to get lost.

The lesson

I learned that even if you are as sharp as a tack (or like to think you are), it’s important to remember that sometimes your guard is down whether you realize it or not and people like door-to-door salespersons can take advantage of that. It’s also a good idea to keep in mind that older friends and relatives might have more of those moments where they let down their guard so you should talk to them about not signing anything at the door.  This can also apply to people who are looking for charitable donations at the door.  Many of them are professionals who’s job it is to solicit donations so make sure that you be careful with them too.

See another post on this problem.

111 replies on “Energy Sales Scams”

That’s disgusting. Unbelievable that he was trying to lie to get people to sign a 3 year contract (and even worse that he denied it after you caught him red handed). And even worse that he’d bring a couple kids along to help him trick people.

I’m sure you’re not the only one who caught on and called him on it. I wonder what the kids will be thinking about “daddy going door-to-door and making all those people angry”.

One bit of advice that seems like a good “guiding principle” is to only do business with people that YOU initiate (so if you walk into a store, do business with them, but if someone phones you, stops you on the street or knocks on your door, don’t).

The guys who’ve knocked on my door always have a whiff of desperation about them in some way (one guy just about begged my husband to sign up), but bringing the kids is a new one on me!

What’s really surprising to me, having read through the epic Ellen Roseman comments section the other day, is that they use the same approaches (folded contract, asking for your bill, knowing when you’ve just moved in) throughout the province. God knows I’m a cynic but I hadn’t actually realized that they must be training the salespeople in these tactics.

A few years ago a door to door salsperson showed up at our house and managed to convince my wife that we would save money by signinh a fixed term contract with them. We have to furnaces and two gas meters in our house since there was an apartment at one time.
Despite the fact that their gas rate was less than Union Gas, which was their claim, not once in five years did their effective cost per cubic meter ever come in less than that of Union Gas.
I know because I compared the bills every month.
The worst part of it all was getting out of the agreement with them. I sent in the written notice of cancellation before the due date and it was supposidly never received. I kept a copy which I faxed to them to prove it was sent before the required date. Make a long story short it took them 18 months past my contract date to release me from their clutches. I phoned many times and all I was told is that it takes time, and also it was not their fault, rather it was Union Gas that was slowing the process. It was all lies. Over the 18 months I paid over $300 extra to them that I would not have paid to Union Gas. Automatic renewals should be illegal.
So Beware

I added the last line last night after getting two charity marketers at the door – one guy was from the Sick Kids Hospital which I think is a great cause but quite frankly I don’t like people coming to the door and asking for money. The other problem is that this guy was a pro – very, very good and it was really hard to get rid of him.

I need to come up with a solid line that I can use for everyone at the door – as Cheap says – that’s not the place to do business.

knowing when you?ve just moved in

I never thought about that Guinness, but we had just moved in when he showed up.

So if either of you are looking for an exciting new blog series for Four Pillars ?.

I think Cheap would make a great undercover operative. 🙂

By Post Author

“Cooling off period” —

Even if in a moment of lapsed reasoning, you sign the contract these clowns bring to your door, in Canada there is a 14 day “cooling off” period that allows you to back out. The paper these guys are bringing to your front door are not valid contracts, and in no way “legally binding”.

What has to happen is these energy companies will phone you 14 days after signing and ask for your verbal confirmation (which they subsequently record). If you say you’re no longer interested, no changes are made, and you remain with your existing energy provider (which at today’s rate of 24 centers per cubic meter, is a MUCH better rate than any of these guys can offer).

I am so glad I didn’t sign with Universal Power
and whoever came a month next, etc..

It’s almost as bad as Primerica in terms of scam level – why would they want you if they aren’t making money off you?

And every time I asked “are you selling fixed-rate gas?” They always say NO, but they ARE!!

They even claim they’re from Union Gas (the current official provider) to check on your bill for discount etc..

Charitable solicitations and anyone else who shows up at my door are invited to leave an information package that I can read when I have time (I always don’t have time “right now, sorry”). The only exception is kids selling girl guide cookies or smarties for their school–I always buy these and have been known to buy the kid’s last four boxes of smarties. These will never go to waste and last for weeks in the freezer; I love frozen smarties.

Sometimes I truly wish there was an actual lightning bolt that would come down and zap these people when they outright lie. There should also be a huge roll of thunder too if they’re doing it to a little old lady. Man, when I was a kid my dad used to tell me the worst thing you could call someone was a liar and to this day I live by that.

Leslie – that’s great advice – I’m going to start saying I don’t have time and asking for documentation.

I also don’t mind giving money to local kids for their fundraising efforts.

By Post Author

Funny story – on the same night recently when the pro guy soliciting for sick kids came to the door, another guy came about an hour later (very unusual to get two in one night). He was male, a teenager (I think) and he definitely wasn’t a pro. He was collecting for some 5 km walk sponsored by Irish Spring soap (this is important) and the funny thing about him was that he was talking in a very high voice like he was imitating a girl and the way he was talking was a bit odd as well.

Anyways, I sent him away sans donation and realized later that he was trying to do an Irish accent when he was giving me his spiel. It was very, very strange…

By Post Author

Totally agree to ask for written literature: I say that I make financial decisions jointly with my spouse and only after confirming the facts. For charities say that you want materials because you make donations at one time per month. When they try to get you to commit on the spot, repeat the same line firmly and politely and then say goodnight. Talk to friends and relatives who might be vulnerable and have them commit to always getting literature to discuss with trusted person later. In California there are people who “run” kids goign door to door selling candy so kid does not equal innocent sales pitch.

I think that energy deregulation has brought many bad things as opposed to any good to the economy. Remember california’s power outage in 2000? Remember Enron in 2001?
And there’s one thing that I never do – I never open my door to anyone who i don’t know. If they keep on knocking i inform them that I am calling the cops..

Bringing kids along is a nice disarming trick. We don`t buy anything from anyone who intrudes by knocking on our door or calling us on the phone.

Talkers are hawkers. We`re not obligated to pay them with our attention.

Leslie, just wanted to say that I followed your advice tonight when a couple of telemarketers came to the door tonight – Before they could get going on their speech, I said “It’s not a good time right now” – and they immediately said “no problem” and took off.

I don’t know if it was the words (which I had practiced), the timing or the steely glint in my eye but they clearly knew the battle was lost and there was no point in sticking around…

Mike

By Post Author

Hi Gas Marketer – thanks for the comments.

The point of the post was to warn readers about various people who come to the door who may or may not be trying to scam them. Whether the ratio of dishonest gas resellers is 1% or 99% is irrelevant since the idea is to be aware that doing deals for ANYTHING at your front door is not a good idea.

I’d also like to add that your extreme lack of professionalism speaks volumes about you and your profession which doesn’t help your side of the argument at all.

Mike

By Post Author

Lol, now I trust the integrity and professionalism of all gas marketers. Oh wait, no I don’t. In fact, I have a worse impression than the article gave me.

My theory: dude is actually anti-gas marketing and is trying to make them look bad. 😉

Ok, now that I’ve stopped laughing….

I like the idea of asking for literature just to make them go away faster. And I never do have time for sales pitches, I could normally be doing something better. Great ideas Leslie!

I’m also very happy that I live in a small, locked apartment building…hard for people to go door-to-door. Just 6 families, so if their kids are ever selling cookies, I’ll probably hear about it and may buy some. But otherwise I’m safer.

Mrs. Micah – living in an apartment building must cut down on unwanted visitors (I hope).

Guinness – I checked out his site – I don’t think there is much energy resellin’ goin’ on there…. 🙂

By Post Author

I have worked in the Customer Service department of an independent gas supplier and the truth is they are ripping off their customers.
The agents use shady tactics to get customers to sign up, and really who can blame them when the company’s fixed rate is 30-80% higher than your local utility company?s price. Would you sign up if you are told at the door your first bill with the company will probably see a $100 increase?
Besides misrepresentation and misinformation from the door to door agents everything is legal and is spelled out in the terms and conditions. I understand most people will not read a couple of pages of legal jargon interspaced with valuable information and agent misrepresentation is hard to prove since it is followed by a phone call which is recorded with the customer agreeing to the price they are paying and for how long they will be paying it.
The tactic suggested by in this post of not signing anything that is brought to your door where you are unprepared and feel rushed is the best course of action. If you feel compelled to sign due to a supposed ?discount? or ?peace of mind? than make sure you are informed and are asking the right questions. What will I be paying if I sign up? What am I paying now? How severe are the market fluctuations?
Be informed!

-Corporate Devil

I ALSO WORK FOR AN INDEPENDENT NATURAL GAS SUPPLIER AND IT CAN GO EITHER WAY. THERE ARE SOME PEOPLE WHO ARE DESPERATE FOR THE SALE AND WILL TELL YOU ANYTHING TO GET THE SALE. BUT SOME PEOPLE ARE GOOD HONEST PEOPLE. I DO NOT LIE TO PEOPLE. I DO NOT TAKE ADVANTAGE OF “OLD LADIES” OR MAKE PEOPLE FEEL LIKE THEY ARE GETTING SOMETHING THAT THEY ARE NOT. THE FACTS ARE IN BLACK AND WHITE. YOUR RATE IS ON YOUR BILL. AND IF A MARKETER IS LYING TO YOU SAYING THAT YOU ARE GOING TO GET A DISCOUNT, WHAT MAKES YOU THINK THAT THEY WILL TELL YOU THE TRUTH WHEN YOU ASK THEM HOW MUCH YOU ARE PAYING RIGHT NOW? KNOW YOUR BILL. LOOK AT YOUR GAS COST EVERY MONTH AND WHEN THEY APPROACH YOU THEY WILL NOT BE ABLE TO HOOK YOU BECAUSE YOU KNOW WHAT A DEAL IS AND YOU KNOW WHEN TO CLOSE THE DOOR. AND ALSO, TRUTH BE TOLD, THERE ARE GAS SUPPLIERS OUT THERE THAT ARE HONEST AND CAN HELP. MOST OF THE TIME FIXED RATE PROGRAMS ARE NOT THE WAY TO GO. BUT THE QUESTIONS TO ASK ARE…..
AM I SIGNING A CONTRACT?
WHAT IS THE RATE?
HOW LONG IS IT GUARANTEED FOR?
WHAT HAPPENS AFTER THAT DATE?
HOW LONG IS THE CONTRACT?
IS THERE A CANCELLATION FEE?
AND MOST IMPORTANT, FIGURE OUT WHO YOU ARE TALKING TO….
wHAT IS YOUR NAME?
LAST NAME?
WHAT IS THE NAME OF YOUR COMPANY?
WHAT IS THE PHONE NUMBER AND MAILING ADDRESS TO YOUR COMPANY?
AND GET THE SPECIFICS…..
WHAT IS THE PROCEDURE IF I WANT TO CANCEL?
WHERE IS MY COPY OF WHAT I AM SIGNING?
I WANT TO READ THE WHOLE THING?
HONESTLY, YOU SHOULDNT HAVE TO SIGN ANYTHING IF THEY ARE TRYING TO HELP YOU.
JUST KNOW YOUR GAS BILL LIKE THEY KNOW THEIR SALES TECHNIQUE. DONT JUST LOOK AT THE AMOUNT DUE. STUDY YOUR GAS BILL. IF YOU DONT KNOW WHAT SOMETHING MEANS OR WHY IT IS THERE, CALL AND ASK.
I WISH THE BEST FOR ALL OF YOU AND A PROSPEROUS YEAR. BUT YOU SHOULD KNOW THAT WE ARE NOT ALL BAD.

Wow. I found this through a link at AskMetafilter and it just confirms my gut feeling about door to door salespeople for gas and electric suppliers.

That said, there probably are some reputable gas suppliers out there, but you have to find them. When I moved into my house, I checked out a few companies and found one that did give my a decent rate for a 5 year contract. Service has been great, costs have stayed low, and I’m pretty happy.

But I just don’t buy anything from anyone who knocks on my door. (Well, except for those kids with the big boxes of chocolate almonds. I do both of us a favour when I buy those. )

Be careful of offers in the mail. Universal Energy also sends out cheques for various amounts and if you cash them, you are signed up for their program. I was away last November 2007 and my sister deposited one such cheque for me. When I returned December 17, 2007 and realized what she did, I called them to cancel and return their cheque. They customer service rep said there was no such account under my name or address and there was nothing I could do about the $100 cheque. Then, in Mar 2008, I receive a call from them informing me that I have been a customer since Dec 1, 2007. I immediately spoke to the rep and explained ths situation. The rep told me to return the $100 with a letter explaining the situation and the account will be cancelled, which I did. Now I get another call on April 7, 2008, telling me that I will owe them approx. $860 to cancel the account.

Be careful of this underhanded trick.

UNIVERSAL HAS LAWSUITS AGAINST THEM AT THIS TIME. THEY ARE UNDER INVESTIGATION FOR FRAUD. DONT JUST PAY IT. DO YOUR HOMEWORK. YOU CAN GET OUT IF THAT ONE

Glad to have stumbled across this post and subsequent comments. Love the blog, by the way. I’ve been lurking for about 8 months.

I signed with a door-to-door Universal agent about ten days ago, but will now back out of the pending agreement. Can’t wait for the ride they’re going to take me on. Although I haven’t received their written contract in the mail, anyone know if I can opt out already? Would you suggest a phone call or registered letter?

Will definitely be taking mea’s advice from now on.

Hi Ryan – I would suggest both a phone call and letter.

If you are in Ontario then check out Ellen Roseman’s columns in the Star – I’m pretty sure they explain how to get out it.

Good luck!

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hey ryan. did they give you a call (referred to as a verification call?) Did you say yes to everything? most of the time what they do is have you do something at the door, like sign the paper saying that you want it, but it is that call that makes it official. even of you did, you can still opt out. universal was required to cancel all of their contracts, and like i said before, are still under investigation and facing heavy fines for the misrepresentation of the “program” that they offer. I would make the call and send the letter if I were you and also, you can find out about the details of the fraud investigation by searching universal @ the fox news website. good luck to you .

i used to work for a call center that pitched interstate gas supply,they are a natural gas supplier to gas customers in ohio,illinois,indiana and new york.
there were employees that would get gas bill account numbers,and a friend would pose as that person and do the 3rd party verification to seal the deal,and get their commission for the sale.
the actual person wouldnt know about their supplier being changed for at least 2 months.

this happens all the time,and the gas suppliers dont care .

They are all mill-hired get-what-you-can don’t even like this job anyways dummies. They don’t care one bit about you, your interests, your family, your childeren. All they want is MONEY and when they don’t make any they lie and get nasty to homeowners.

They are scumbags that steal money from old people. I have more respect for bums, they at least don’t steal.

Bill

jey, i work for igs and that is not possible. tell me, how long did you work there. maybe that was a different amrketing group and perhaps that is why that marketing group lost the contract and that is why we have it now. igs is a really great program, and if you look on the apples to apples web site you will see that igs has lower rates than any supplier out there, or even the utility companies. we are monitored closely every single day, and any misrep or shady business is remande immediately. those agents are fired and dont get credit for that. aside from that, those customers dont end up changing suppliers. the utility sends them notice immediately and if they did not choose a supplier, all they would have to do is call. anyone can cancel igs at any time, because there are no contracts or cancellation fees. they can even cancel before it affects their bill. the program does take 1-2 billing cycles to take effect on their account. thay cann call the same day and cancel if they like. what do you really know about igs?

actually, we do. there are 2 utility companies that we pffer a guaranteed savings to. which is a really great program. but when you look at the big picture, a fixed rate program is even better. we can offer a guaranteed saving from the rate at a certain percentage, but what if the rates really skyrocket? a fixed rate program can give you one rate no matter what. 4 months ago, nobody who had michcon wanted to take a rate of .97 because the rates were only .76. which is understandable. i would have questioned that too. but, in only 2 months, that rate has increased 43% to 1.005. now, if they would have takenn that rate then, thay would only be paying .97 now. so now everybody is jumping on the rate now that they see what is happening. if the rate continues to increase the same amount every month, by june, thay will be paying nearly 1.50. saving .53 cents per ccf can mean a savings in the amount of $50 to $200 per bill for these people. i really do feel like I am helping people. Its all about the rate that they are paying and its potential for increase. futhermore, we are in an energy crisis right now. this is the first time in a long history that the rates have actually increased in the spring and summer months. they usually decrease. but these rates for utility companies are increasing as moch as 90% for the sping this year. i dont need to mislead people to be able to help them. if i cannot help them what is to push? and on top of this, i dont get paid by the deal. granted, i make very goode money at my job. but i make $18 an hour regardless if i help one person of help 100. im not saying that the program is for everyone. there are some people who it cannot help. some people actually are paying lower rates. that is wh i say to the customers on the phones and on this site to be aware of he rate that they are now paying. keep an eye on it. visit the public utilities website often to find the best deal out there. the people who take advantage of unknowing consumers are just heartless individuals who only care about how they look. i agree with you, most gas suppliers are a headache. but i am only speaking up for what i know is right and what i see and say and do everyday. there is an exception to stereotype.

we do. starting today, we do. guaranteed savings for customers in ohio and illinois

I DONT THINK YOU GUYS EVEN READ THE CONTRACT. THERE ARE LOTS OF PLACE’S THAT FIX YOUR GAS RATESAND ITS NOT A SCAM BECAUSE THEY BUY IT WHOLE-SALE AND PUT YOU ON A FIXED RATE SO THAT WHEN THE PRICE GOES UP WHICH IT DOES EVER 6 MONTHS YOU SAVE MONEY.EVERYONE THAT COMMENTED IN THESE BLOGS NEED TO GO AND INFORM THEM SELVES ON ENERGY RATES BECAUSE CANADA AND USA ARE IN A ENERGY CRISIS EVER SINCE CANADA SHUT DOWN THERE COAL PLANTS THAT DISTRIBUTES 30% OF CANADA’S ENERGY AND FIXING PEOPLES RATE WAS AN AMAZING WAY TO HELP PEOPLE SAVE AND AN AMAZING BUSINESS OPOTUNITY.

Ok, that’s it! No more all-capital-letter comments allowed! Mr. Cheap gave the warning and I’m following through.

Seriously, for those of you (“kristine” and “few and far between”) – if you have a piece of chicken chow mein holding down your caps key then please clean it out – otherwise get a new keyboard (or a life – whichever is more appropriate).

By Post Author

Bottom line, you can lead a horse to water but you cant make him drink. Deregulation was something that the people voted for. but they are afraid to utilize programs that they themselves have put in place. its kinda sad actually. people spent years complaining about the monopoly taking place with the utility companies, and kept asking, “what are THEY going to do about it?” But now you have been given the right to do something about it yourself, and you choose to do nothing but continue to complain about what options are being given to you. so now, the question is, what are YOU going to do about it?? Just like with everything, there are people who can make a scam out of everything. Look at the stimulus payment for example. They are receiving complaints left and right about the scams people are pulling online and in the mail to turn it into a tool to scam people. Does that mean that they should stop the stimulus payment altogether? No. That is about our economy and what is necessary to revive it. It is up to the consumer to stay educated about the matter and use discretion in the situation, so as to use it to their advantage. Same thing with the energy market. It was put in place to help, so use it in a way that can benefit you. Stop complaining and do your homework.

the only thing to say now is that it is the consumers responsibility to research the program being offered. stereotyping is ignorance. that is the point I am trying to get accross. I know that I am proud of what I do, and I come home each day, confident that I dont scam anyone. let me ask you, J, do you still work for the Marketing firm that promoted IGS?

Just adding my $0.02. I just received a solicitation call from IGS. I’ve newly moved in to my apartment. She did identify herself as being from IGS but did so _very_ quickly and kept repeating Nicor (local regulated supplier) so at first I thought she was from Nicor. Long story short, not until she asked for account number did I realize she was not from my supplier and I proceeded to do some research on my own. It turns out that historically from 2006-2007, in Illinois, 92% of the individuals who went with IGS LOST an average of $167 per year over the regulated gas rates (http://www.citizensutilityboard.org/ags37.php).

Needless to say, I will not be going with IGS or any unregulated reseller.

i got a call from IGS Energy also,and am a NICOR customer.
this lady told me they can only guarantee a 3 cent discount under the utility rate for 3 lousy months,when you dont use natural gas except for the stove and water.
after that she told me i would receive a competitive rate,but no guarantee it would save me money.
she kept trying to get me to give her my account number off of my NICOR bill,and i eventually hung up on her,but still continue to get calls from them,i just dont’ answer.

Hi, the same thing happened to me except it was on the freakin PHONE!!! gosh, you’re so correct about that being a hard person doesn’t mean you won’t be tricked. Luckily I canceled immediately. However unlike gas, It was electric. I think all sorts of companies are doing these things. I think these people should be banned or something. Can you charge them for tresspassing your property? Maybe we all should put up signs to warn off strangers solicitors!!!

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