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Thursday, November 01, 2018

VIRIDIAN ENERGY CUSTOMERS BEGIN RECEIVING REFUNDS FROM $5 MILLION SETTLEMENT WITH AG’S OFFICE OVER DECEPTIVE MARKETING AND SALES TACTICS

VIRIDIAN ENERGY CUSTOMERS BEGIN RECEIVING REFUNDS FROM $5 MILLION SETTLEMENT WITH AG’S OFFICE OVER DECEPTIVE MARKETING AND SALES TACTICS
Competitive Electricity Supplier Distributes Initial $1.8 Million to Customers During First Phase of Restitution Program
BOSTON — On the heels of her lawsuit against another competitive electricity supplier, Attorney General Maura Healey announced today that customers of the competitive electricity supplier, Viridian Energy, LLC, (Viridian), are beginning to receive restitution payments as part of a $5 million settlement reached with the AG’s Office over allegations of deceptive marketing and sales tactics that lured residents into costly contracts with high electricity rates.
The payments are part of an assurance of discontinuance the AG’s Office negotiated with Viridian and its affiliates in March 2018. The AG’s Office alleged that Viridian, 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 alleged that consumers who switched to Viridian ultimately paid more for electricity than if they had stayed with their utility.
“Competitive electric suppliers like Viridian Energy use aggressive sales tactics and false promises to cheat customers out of millions of dollars,” AG Healey said. “My office is seeking to ban these companies from signing up new customers and end this abuse of our residents.”
In March 2018, AG Healey issued the results of a report commissioned by her office that called for a ban on competitive electricity suppliers signing up new, individual residential customers in Massachusetts. The report found that Massachusetts residential electric customers who switched to a competitive electric supplier paid a total of $176.8 million more than if they had stayed with their utility company during a two-year period from July 2015 to June 2017. The report also found that during the study period competitive suppliers used aggressive sales tactics and appear to have targeted low-income, elderly, and minority residents.
Under the terms of the Viridian settlement, the company will return a total of $4.6 million to qualifying customers who were allegedly misled into signing costly contracts. The remainder of the $5 million settlement 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, through an independent trustee appointed to manage the restitution program, began distributing checks to qualifying customers on Oct. 10 and will continue over three remaining phases. During the first phase of the program, approximately 20,000 Massachusetts customers will receive $1.8 million over three months.
Eligible customers who do not receive a payment during the first phase will receive payment in a future phase of the program. Customers qualify for restitution if they signed up for Viridian’s electricity supply services before May 1, 2018 and:
  • Enrolled in a variable-rate contract with Viridian;
  • Were automatically renewed from a Viridian fixed-rate contract to a Viridian variable rate contract;
  • Enrolled in a contract through door-to-door sales company Platinum Advertising; and/or
  • Enrolled in a fixed-rate contract with a three-year term during the period of September 1, 2014 through August 31, 2015. 

Viridian’s variable rate electricity contracts are also subject to a class action settlement reached in Sanborn et al. v. Viridian Energy, Inc. et al. in federal district court in Connecticut.  Customers who qualify for restitution under the AG’s settlement will receive restitution regardless of whether or not they participated in the class action.
To view a sample of the letter mailed out to customers who qualified for restitution click here.
The AG’s Office has returned millions of dollars to Massachusetts customers through its previous actions against competitive energy supplies. In January 2015, Just Energy agreed to pay $4 million in restitution to consumers for deceptive marketing and sales, entering consumers into agreements without their consent, and charging costly termination fees.
Last month, the AG’s Office sued Starion Energy for allegedly falsely promising consumers electricity rate reductions in unsolicited telemarketing calls and pre-recorded robocalls and then charging those consumers tens of millions of dollars more than they would have paid if they stayed with their utility company.
This case is handled by Assistant Attorneys General Elizabeth Anderson, Joseph Dorfler, Alexander Early, and Elizabeth Mahony, and Deputy Division Chief Nathan Forster, Division Chief Rebecca Tepper, and all of AG Healey’s Energy & Telecommunications Division, along with Energy and Environment Bureau Chief Melissa Hoffer.

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