Massachusetts customers will start to receive electric supplier funds from settlement with AG.
In 2020, a $10 million settlement between electric supplier, Starion Energy, Inc. Connecticut’s Attorney General Maura Healey’s office, which marked the state AG’s highest to date, was reached. The settlement stemmed from an October 2018 lawsuit in which the AG alleged Starion, along with two other defendants (Ruzhdi Dauti, and Dashmir Murtishi), “violated the state’s consumer protection laws by engaging in unfair sales tactics, including unsolicited telemarketing calls and pre-recorded robocalls, that deceived Massachusetts customers by falsely promising them lower electricity rates while ultimately charging them, collectively, millions more on their bills.” Now, customers will begin to receive the funds due to them.
According to the terms of the deal, Starion Energy will pay $7.25 million to customers and $250,000 to the state. Up to $2 million of the remaining $2.5 million may be forgiven if supplier complies with the terms of the agreement. Customers who are eligible to receive restitution will be mailed a check without having to file a claim. The checks will be received over the course of the next two years. To be eligible, customer will have had to “purchased variable rate electricity service from Starion, paid more than they would have paid their utility for basic service electricity, and did not separately seek restitution through Starion’s Delaware bankruptcy proceeding.”
AG Healey said. “Our settlement returns millions of dollars to tens of thousands of customers who were harmed by this company’s deceptive tactics. We are working to stop these predatory companies from scamming Massachusetts residents.” She added, “Starion signed up more than 117,000 Massachusetts customers to variable rate electricity contracts…These customers paid millions more for their electricity than they would have if they had received basic service from their utility company.”
The consent judgment also requires Starion to make several substantial changes to its marketing strategy within the state of Massachusetts, including an agreement to not enroll any new Massachusetts customers into a variable rate contract for a three-year period. Low-income customers must only pay for electricity bills that do not exceed what they would have paid if they received basic service through their utility company. Starion must also hire, and at its own expense, and retain a third-party to monitor the implementation of these changes.
In the last four years, residents in Massachusetts filed more than 1,000 complaints with the AG’s Office about competitive suppliers engaging in underhanded, deceptive marketing practices. Healey’s office has issued two reports on the impact of the market in Massachusetts, and in January 2019, she filed legislation to ban suppliers from signing up new residential customers via door-to-door marketing.
“Residents in Massachusetts depend on reliable and affordable electricity for their homes – they should not be taken advantage of by door-to-door salespeople trying to trick them into high-priced contracts,” Healey said at the time, calling the move “part of my office’s efforts to stop predatory competitive supply companies, and the aggressive third-party marketers who work on their behalf, from scamming customers in our state.”