Door-to-door deception: Gas bill spikes after surprise switch

Target 8

GRAND RAPIDS, Mich. (WOOD) — They may have knocked on your door: salespeople wanting you to switch your traditional natural gas supplier. The problem is that it may be unclear what you’re being asked to sign.

Twenty alternative gas companies have been allowed to work in Michigan since the industry was deregulated in the early 2000s. At the time, gas prices were high and state lawmakers thought competition would bring down prices. There have been some issues.

Ruth Overly, 83, was working in her rural Muskegon County yard when a gas salesman came to call in 2018.

“He made me think something was going on with DTE,” she said.

She though he was with DTE Energy, her traditional supplier. She just wanted to get rid of him and get back to gardening.

“He had a piece of paper on a clipboard and he wanted me to … sign this and I thought it was just an opinion paper in case something happened to DTE,” Overly recalled.

It turns out what she signed was a contract with an alternative company. She said she didn’t realize she had switched until her bill ballooned last winter and she called DTE.

“I never would have signed a contract,” she said.

She switched back, but ended up paying twice what she had been paying with DTE. But she still hasn’t caught up. She says she can’t afford it and stopped paying her bill last October. She expects a shutoff notice any time.

1,900 COMPLAINTS IN 2 YEARS

A national industry spokesman, Dan Allegretti of the Retail Energy Supply Association, says consumers need to be educated about alternative gas choice after years of being restricted to using the single highly regulated company for their area. He said sending salespeople door-to-door or having them call helps the alternative companies do that.

But he acknowledged the continuing complaints about sales practices, saying “oftentimes it can be a handful of individuals that become very aggressive.” He said his association takes those complaints seriously and supports action by state regulators when complaints are proven.

Using the Freedom of Information Act, Target 8 investigators got a list of complaints against the 20 alternative gas suppliers over the last two years. There were more than 1,900, mostly about contract cancellation. Nearly 500 were about sales practices like deceptive marketing, slamming and unauthorized switching.

The Michigan Public Service Commission, which regulates gas and electric utilities, says some of those complaints don’t hold up.

“They are less frequent than they were in the early days of the alternative gas suppliers,” the agency’s Anne Armstrong noted.

She said the MPSC investigates every complaint it gets, talking to the supplier and trying to resolve it for the customer.

The agency also keeps track of trends and can take further action when it looks like a company is getting in trouble. In the last few years, one company had to make a $25,000 donation to a charity that helps people pay their gas bills as a penalty. Another paid a $35,000 fine and was temporarily banned from selling door-to-door. The MPSC can also revoke an operating license.

“It’s the deception that we don’t like,” Marie Bosma said.

She’s a friend of Ruth Overly and had heard about her complaint, so she was ready when a couple of sales guys dropped by in November. She said they waved an unreadable ID tag and said they were from her supplier, DTE.

“I told him right away that I’m not signing anything,” she recalled.

Then he tried something else.

“As he turned to leave, he says, ‘You’re going to get a shutoff notice in two or three days,'” Bosma said.

That didn’t work either.

Bosna worries that “there’s other people that don’t know what’s going on and they might sign.”

HOW TO PROTECT YOURSELF

“The customer is in control,” MPSC’s Anne Armstrong said. “Do not sign a contract that day if you do not feel comfortable.”

It’s always good advice to avoid signing anything somebody hands you when they just show up uninvited. The first thing you should do is slow down and do some thorough checking.

That’s why the MPSC has a website loaded with consumer advice on dealing with door-to-door utility sales, including a checklist of questions to ask. There’s advice about rules and rights and an easy way to file a complaint.

Perhaps most important is the state’s “MI Gas Compare” feature. It’s a monthly update of what traditional gas suppliers like DTE and Consumers and alternative suppliers are charging so people can compare prices before they decide if they want to switch.

The MPSC regulates the rates of the traditional suppliers, but does not have any control over prices the alternative suppliers charge.

Ruth Overly didn’t know about any of the state resources when the salesman called and said she didn’t think she was signing a contract to switch. She says her doubled gas bill has given her “a stomachache.”

“I’d like to really get them for turning my world upside down,” she said.

Target 8 investigators tried to contact the company Overly signed with, Michigan Natural Gas LLC, by email and phone but did not get a response.

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