Direct Energy / negative option contract renewal!
In 2001 I signed a five year natural gas contract with Direct Energy. The contract was due to expire in August 2006. Around May of 2006 I received in the mail a large envelope with a contract renewal form. Direct Energy was offering me another five year contract for 44 cents a cubic meter. The price of gas through Enbridge at the time was around 34 cents, so I decided to put the contract aside for a while and watch what gas prices were doing. (Prices are approximate. I am operating from memory.)
Well, prices went down. One article I read said there was a temporary oversupply, and further price reductions were a possibility. (At the time of this post, February 2007, the price through Enbridge is 31.5 cents.) I decided not to renew.
Around November of 2006 I happened to notice my gas bill was unusually high. When I looked at it closely, I was surprised to see that not only was I still paying to Direct Energy, but the rate was a staggering 49.9 cents a cubic meter. I had not thrown out any of the contract renewal papers, so I went through them carefully. Surprise! If you want to discontinue your contract you have to sign a form and mail it to them. I signed and dated the form and sent it to them via registered mail.
When my January bill came I was surprised once again. I was still paying to Direct Energy. After more checking, I discovered I was too late. I could only withdraw from the contract within 35 days of my first bill, which would have made the deadline some time in October. I am stuck paying this rip off rate until August 2007.
I have two complaints with this company. First, the entire practice of negative option contract renewals is a scam. A contract should be something you sign to get into, not something you have to sign to get out of. Second, their rate of 49.9 cents, when the going price is 31.5 cents, is an outrageous rip off.
No doubt, Direct Energy would say this is my fault for not reading the contract renewal in its entirety when I first received it. Perhaps. But I would prefer to do business with a company that isn't hovering like a vulture waiting for me to make a mistake so they can pick the flesh from my bones.
My advice to anyone dealing with this company - Don't expect them to be honorable or honest. Go over everything you get from them with a fine tooth comb, preferably with a lawyer present.
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