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Direct Energy / negative option contract renewal!

1 Canada Review updated:

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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  • An
      8th of Mar, 2007
    +1 Votes

    I signed a five year contract which is actually only 4 years. On the fourth year they sent papers which i thought was junk mail. I didn't responded. My rate went up before the actual five year contract had ended. I called they said i didn't fill out and return the paper work so for the last year my rates are based on a one year rate. I thought that's not right, five year contract rate should be five years not four. {they have all their fine print to protect them} so i thought fine we will run the last year then i'm out of this contract. I figured verbal on the phone was enough. I assumed i was back will union gas. My bill was very high so i looked closer direct energy was still my supplier charging me 44.9 when the rates are 34. I called them thinking my contract was long over to find out they just keep signing you up unless you fill out a forms. I asked for the forms and was told they will send them 3 months before the contract ends. I can not get out of a contract i never sign for until the end is up. How can that be legal!!! Hopefully they sent the papers to remind me and i can rid myself of this lech.

  • Lo
      21st of Nov, 2007
    +1 Votes

    i totally agree with you i to have been scammed by these con artists i have filed a complaint with the oeb

  • Lo
      26th of Nov, 2007
    0 Votes

    They are scam artists in my option telling consumers about these bogus 100 checks that never come just a lie to get consumers to go with them.

  • Ca
      28th of Nov, 2007
    -1 Votes

    I work for D.E. You made the mistake of not reading a contract that you initially signed. This would make you the responsible party in this agreement. Its unfortunate that you did not read your contract correctly, and it is of no fault of D.E. I hope that you listen and ask the appropriate questions next time. Furthermore the 100 dollars IS NOT a scam. It is a bill credit and is adjusted on your bill as so! It would be illegal for us to offer a bill credit coupon without following through! These complaints here are invalid and unjust. Every Utility has to adjust their rates, and we all follow the rules and regulations set by the OEB (Ontario Energy Board). My advice is to read your terms and conditions before you agree to a contract. EVERYTHING you need to know is included in these packages. We do not send them out for our health! Thank You.

  • Lo
      29th of Nov, 2007
    0 Votes

    Why was direct energy fined for forged contracts.

  • Ad
      16th of Dec, 2007
    +1 Votes

    I want to thank you for your comments, Direct Energy is now coming into Connecticut. This was very helpful... thank you.

  • Lo
      20th of Dec, 2007
    +1 Votes


  • Lo
      2nd of Jan, 2008
    +1 Votes


  • Ta
      30th of Jan, 2008
    +1 Votes

    In 2006, I entered into an agreement with Direct Energy for the provision of natural gas to my then current address. In June 2007, we moved from this address to a temporary location (rental) while our new home was being built. In late May 2007, we received a letter from Direct Energy advising us that we still had an agreement with them, and that if we elected not to renew, we would be required to pay an early termination fee of $912.66. As we had not even moved into our new home yet, we advised Direct Energy via one of the many harassing phone calls received by their customer service department (they called almost every two days, like vultures...), that once we had moved into our house, we would be in touch.

    In the interim, we attempted to locate our original written agreement with Direct Energy as we were under the impression that it was only applicable to our previous address. Unfortunately, with the move and unpacking, we were not able to find our copy.

    In August of 2007 we moved into our new home and decided, based mostly on our irritation with Direct Energy, not to renew with them. In early November, we received a letter from Collection Group of Canada Inc. on behalf of Direct Energy, demanding the amount of $912.66. Following this letter, I placed a call to Direct Energy requesting a paper copy of my contract so I could verify the terms and conditions with respect to having to carry these services over to our new address.

    Direct Energy never responded to this request, and the paperwork was never received by us. On November 30th, Collection Group of Canada Inc. sent a second letter on Direct Energy’s behalf demanding, in an incredibly threatening tone, that we pay the $912.66 immedidately “to avoid embarrassment – and to govern myself accordingly”. Needless to say, I was not impressed.

    Following this second letter, I called Direct Energy again and requested a paper copy of my contract which they assured me would be forthcoming. December 18th, Direct Energy sent me a voice recorded telephone call between myself and one of their representatives from November 2006 in which I agree to subscribe as per the terms of my agreement (duh! )

    I called Direct Energy AGAIN on January 3rd, and requested a PAPER copy of my contract. Again, it was never sent.

    We received a third letter from Collection Group of Canada dated January 2, 2008 advising me that the matter was being turned over to their legal department as I had failed to pay the $912.66 to Direct Energy. Once again, I am advised to “govern myself accordingly”.

    This time, and at the recommendation of the Ontario Energy Board I send a letter to Direct Energy (a more senior person) explaining the problem. The same day I get a call from one of his employees promising to send us a copy of the contract.

    Yesterday, I received a 4th letter from Collection Group of Canada's legal department advising that they are commencing legal action against me.

    I have been extremely patient in trying to get to the bottom of this matter and have requested on at least four occasions for the proper documentation to verify what Direct Energy has told me about the carryover of my contract to my new address. To date, no one has been able to produce anything to me which leads me to believe that my original suspicions are correct and that I have no further obligations to Direct Energy. I have to believe that they are trying to scare me (bully, scam, or whatever you want to call it) into renewing my contract with them.

    I have now submitted a formal complaint to the Ontario Energy Board, and have been in touch with my Member of Parliament about this ongoing harassment.

    I am embarrassed that I ever agreed to enter into an arrangement with this organization, and intend to make sure that anyone that will listen to me knows what they are really about.

  • Lo
      31st of Jan, 2008
    +1 Votes


  • Fr
      18th of Mar, 2008
    +1 Votes

    Well - so much for corporate trustworthiness - scam is all I can say. The public has been duped. I have almost the excat story as Tammu Emond, and have been on the phone for 1 year since we have moved. The negative contract, etc was renewed by DE in Nov 2006 (admitingly I did not inform myself of the fine print). However, when I called in Februaty 2007 to cancel, there was a simple agreement to do so and no other words. In July of 2007, DE is still on mu bill. I continue to call and ask for cancellations, and they repeat that there is no paper work for February. Further phone callis in Agust, Spetember, October and November. At this point, I really don`t care about February, just that they now have my call recorded as it says in their electronic phone reception, and they have not provided paper work. Each person I speak with acknowledges the complaint, but nothing is done. By Novemeber, I have sent a nasty email, gotten into a heated dsucssion with a another person at DE, and finally extracted a commitment on the phone to have us off DE contract by January of 2008. It is now March and still no change.

    Are we to continue to take this totally unacceptable business practice on daily basis - isn`t it time a class action suit is brought against these clowns - everyday they`re charging an additional 25-33% higher fee for gas and getting richer by not doing anything - it is in their interest BIG TIME to NOT do anything.

    Time we did. I called my lawyer today. I have begun a process with the OEB and tomorrow will contact my MPP and MP.

    Collectively we can do a lot more than one voice at a time!

  • Lo
      18th of Mar, 2008
    +1 Votes


  • Ka
      20th of Mar, 2008
    +1 Votes

    Dealing with DE/GS is a pain in the _____ and even worse when you have to deal with their bull dogs (CGC - Collection Group).

    I suggest that you review the below and make sure you know your rights

    Collection Agencies Act - Ministry of Government and Consumer Services

    Ontario Energy Board

    Know your rights - Collection Agencies will try and bully payments out of you, but will not have proper invoices or contracts to back up their claims.

    I suggest when speaking with anyone DE or Collection Agency to write down and ask for - Names, Times, Collection Licence numbers, promises, reference numbers, invoice numbers, invoice amounts... and If available record all your conversations with them. Most important - Stay calm cool and collected - there is no point in lowering yourself to their sub level standards.

    If anything - Ask to speak to their Legal Department, Management, or Ombudsman.

    Request anything that they are sending you to be by registered letter or courier - Also do the same when sending information to them. Never send DE or Collection Agencies original copies.

    Hope all that are fighting the supposed debts find relief and this information helps.

    Don't give up... that is what they want.

  • Lo
      20th of Mar, 2008
    0 Votes


  • Da
      27th of Mar, 2008
    0 Votes

    DE is a company with no sense of professionalism. Its only mission is to maximize profits at any cost and misrepresenting and lying to potential or existing customers is an accepatble strategy.

  • Mi
      2nd of Apr, 2008
    0 Votes

    I was caught on the negative billing option too, only not as bad. I, like everyone here, agree that the company is a scam. When I called about their pricing, they had said the going rate at Enbridge Gas was 40 cents and, at 35 cents, Direct Energy was lower. Enbridge was only charging 26 cents. The people who work at Direct Energy will outright lie to you.

    On the negative billing option, I was charged higher than the going rate at Direct Energy. They renewed the contract at the 'Green' rate which is 2 cents more. The money goes to the company; it does not give the money to environmental causes but keeps it to itself to for 'Green' capital investments. What a joke...scam. Nobody would ever knowingly agree to the Green rate. It is only a trick, a way to renew customers bills at a rate 2 cents higher than the basic contract rate.

    This company is a sham and their business practices are fraudulent.

  • Er
      22nd of Apr, 2008
    0 Votes

    Direct energy is no different than an internet scam artist that will bilk innocent trusting people out of hard earned money.

    2 years ago a representative came to my door and told me i was paying too much to my local gas utility and that rates were going up.

    being honest and trustworthy toward a representative who should know more about the gas prices than I, i signed a 5 year contract thinking i would save money.

    2 nights ago another representative from Direct energy came by again and told me there is a good possibility i''m paying too much for my gas and he asked to see my current bill . Being conncerned because he was with the company that i signed with, i got my bill and he told me that infact my rate was some 16 cents higher than the local utility. (i had no idea what rates i was paying or what the local utility was charging).

    He then went to tell me that he can offer me the gas for only 12 cents a unit higher than the utilty if i signed for 5 more years. Hmm.. sound stupid to you also? Well i got very irate with this person and ordered him off my property. Withing minutes i called Direct Energy and a representative tried to calm me and offered me yet another rate.. this one only 8 cents higher than the local utility.

    Do they think i'm dumb? do they think your dumb? or anyone.. i think the answer is yes !!! they prey on the ingnorant and tell you anything you want to sign you up.


    I figured i've paid them and additional 300.00 in the past year based on current prices. That is BS and i can't believe we are stuck in a contract for 5 yrs. They are robbing me and you !!! how can we make this stop?

  • Lo
      22nd of Apr, 2008
    0 Votes


  • Fo
      29th of Apr, 2008
    0 Votes

    5 yrs ago my elderly neighbour was deceived into signing up for a Direct Energy gas contract. Afterward she asked me if it was a good deal. Of course I said no, and at her request, we cancelled the contract. About a month later another rep came to her door and again got her to accept another contract by telling her that he was from the gas company. I gave up, the rate was not that bad.

    Well now her renewal notice has come, and it is a negative option, in which they (DE) have the right to renew without her signing anything. Even worse here's a snippet of the notice:

    If you do not choose a 5 year renewal or cancel your Price Protection Plan agreement, we may, at our option, renew your agreement for 1 year at the price for a 1 year renewal set out in the covering letter delivered with this form and in accordance with the revised terms and conditions enclosed. You may cancel your 1 year agreement within 35 days after you receive your first bill with the renewal price.

    I'm not a lawyer but to me the paragraph above indicates that even if you cancel, they will renew and you will again have to cancel the renewal.

    DE is total ###! And what's even worse is that they are owned by Enbridge, our gas supply utility. They clearly have no morals, and the OEB must know exactly what's going on. Write to your MPP. Deregulation(gas or hydro) simply means that there are now more hands in your pocket!

  • An
      5th of May, 2008
    -1 Votes

    negative contracts should be illegal.

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