Attorney General Raoul Sues Alternative Retail Electric Supplier For Deceptive And Unfair Marketing Practices

CHICAGO - Attorney General Kwame Raoul filed a lawsuit against Residents Energy LLC (Residents), an alternative retail electric supplier (ARES), alleging the company’s telemarketers and in-person sales agents used deceptive and unfair tactics to switch customers from their public utility company to more expensive contracts with Residents.

Raoul’s lawsuit, filed in Cook County Circuit Court, alleges that Residents’ sales representatives used a variety of deceptive tactics to lure customers into switching to Residents. During sales solicitations, agents allegedly made false promises of low rates and savings, when in fact Raoul alleges Residents’ customers almost always paid higher rates than they would have if they had remained with their original public utility company.

“Residents used false promises to lure consumers away from their public utility companies. Instead of lower rates, customers ended up paying significantly more than if they had stayed with their public utility company,” Raoul said. “My office is committed to protecting Illinois consumers from deceptive practices utilized by alternative retail electric suppliers, and preventing them from overpaying for the energy they need.”

Raoul’s lawsuit claims Residents’ agents quoted low rates, but concealed the fact that the quoted rate was merely a first-month, introductory rate. In fact, the lawsuit alleges, Residents’ rates increased after the first month and often skyrocketed so that consumers were sometimes paying more than twice their public utility company’s rate.

The lawsuit also alleges that Residents’ agents falsely told consumers that Residents’ rate was historically lower than other public utilities rates. Agents also claimed to consumers that Residents aggressively shops the market to provide lower rates. However, according to Raoul’s lawsuit, Residents’ customers have collectively paid millions of dollars more than they would have if they had not switched from their public utility.

Additionally, the suit alleges that some Illinois consumers paid Residents’ inflated rates without even enrolling with Residents. Numerous consumers have filed complaints with the Illinois Commerce Commission alleging that they were switched to Residents without consent, and sometimes without having had any contact with Residents’ representatives.

Raoul’s lawsuit seeks an injunction against Residents to prevent future violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Illinois Telephone Solicitations Act. The lawsuit also seeks monetary relief to reimburse Illinois consumers, as well as civil penalties, including penalties for violations against older consumers and persons with disabilities.

Assistant Chief Deputy Attorney General Thomas Verticchio and Consumer Protection Division Chief Susan Ellis are handling this case for Raoul’s office. Illinois-based law firms Miner, Barnhill & Galland, P.C.; Hughes Socol Piers Resnick & Dym, Ltd.; and Edelson PC are also assisting with the case.

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