A tricky issue getting some traction

July 20 2009 by Ellen Roseman

I’ve written about Direct Energy’s practice of automatic renewal of gas contracts. Finally, after much nagging, I think I’m getting somewhere on behalf of frustrated customers whose relationship with this company has been extended without their express consent.

DE spokeswoman Lisa Dornan told me that changes are coming to the renewal packages sent in the mail.

We are continually looking at our renewal process to make the necessary improvements to communicate clearly with our customers about their options at the end of their contract term.

Some of the recent changes have included the addition of a “Frequently Asked Questions” section in the package, and upcoming changes include:

* “IMPORTANT RENEWAL INFORMATION ENCLOSED” message on outer envelope – coming in August.

* Underlining the “Renewing this Contract” section on the terms and conditions page (first enclosed page in the renewal package) – effective Sept. 1.

* The addition of “PLEASE TURN OVER FOR MORE IMPORTANT RENEWAL INFORMATION!” in bold, underlined font on the front of the renewal package letter – coming in August.

* Ongoing testing of follow-up options to the renewal package as a reminder to customers of their need to contact us if they do not wish to renew.

We have made, and continue to make, efforts to clarify the communication as much as possible. And we’re taking customer feedback seriously as we seek to improve the customer experience.

All this is good news, though I’d quibble with her statement that DE takes customer feedback seriously. If it did, these changes would have been introduced years ago. There was no reason for the company to drag its feet for so long.

So why now? I think the yawning gap between utility prices and Direct Energy’s one-year price for auto-renewals (up to triple the regulated price) has finally made people realize what’s going on. And they’re fighting mad.

Direct Energy makes it really hard for customers to cancel. Now it’s still hiding the cancellation instructions on the back of its renewal letter. But it’s adding a bold print message on the front, telling people to turn it over.

I guess that’s progress.

7 comments

  1. MC

    Jul 20 2009

    Direct Energy continues to renew contracts without sending the original signed contract to prove that customers have agreed to be bound by the ”Terms and Conditions.’

    It is automatically renewing a non-existing contract for another year at as high as 43.9c/m3, a price randomly determined that cannot be justified when the price of natural gas has been declining.

    The auto-renewal happens if customers do not choose one of the following plans:

    1) 5 year Flat Natural Gas Price Plan – 38.9/m3

    2) 5 year Declining Natural Gas Price Plan – 40.9c/m3, reduced 1c/m3 every year afterwards.

    3. 5 year Carbon Neutral Natural Gas Plan – 40.9c/m3.

    The deception lies not only in the tricky way Direct Energy sells the contracts in the first place, but also in the term ‘PAY ONLY’ used under each of the long term plans for renewal — and printing on the back page of the letter a request to cancel, otherwise automatic renewal at highest rate will take place.

    I was tricked and charged at the renewal rate for a year. If Direct Energy does not refund me or other customers in the same situation the portion of overcharges, they are ROBBERS!

    If the government does not ‘bring in new rules this fall as promised, to end the exploitation of vulnerable people’, they must be as guilty as those energy brokers in the ROBBERY acts.

  2. Lior

    Jul 20 2009

    These door to door and telephone sales for energy contracts must be banned by law. Consumers should be the ones who call Direct Energy and all the other energy marketers to sign up for service and NOT the other way with pesky shysters going door to door tricking people into signing contracts.

    It’s very obvious that given all the complaints you covered about Direct Energy that they have little control over the conduct of their salespeople.

  3. David

    Jul 22 2009

    After 6 months, my contract still hasn’t been cancelled, and I’ve pretty much given up all hope of it ever getting done.

    As soon as the first bill came in and I realized what a ridiculous rate my sister had agreed to, I tried to get it cancelled, and it’s been one thing after another.

    They won’t cancel the account until they receive the cancellation fee ($1,600, last I checked), but I’ve yet to actually receive a bill.

    What kind of weird practice is it to demand the cancellation fee before actually cancelling? What other company does that?

    When I last contacted them 3 months ago, “Rogers and Bell” was the answer I was given. Most assuredly, they do not. You say cancel, your service is cancelled and the bill shows up later. Why can’t they do that?

  4. renold

    Jan 23 2010

    DE renewed my natural gas contract without my aproval. I call them to cancel it but they are saying there will be a cancellation fee.

  5. Evan

    May 31 2010

    Just looked at my rates when they sent me a renewal for 29.9 cents, as I was paying 37.6 cents. I know I never renewed the contract. They also never gave me the rate that I signed up for back in 2000 for a 5 year contract and they confirmed it.

    I want out of the contract I never agreed to and they say if I cancel they will bill me $120. But wait, they don’t have a contract — and on the contract in 2000, they overcharged me.

    I’m asking them to let me cancel with no fees or they can go back 5 years and credit me and spend a lot of time. And if I’m required to do work on this end, I will bill them for my time. They are scammers.