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Direct Energy Services review: Negative option contract renewal! 47

J
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12:00 am EST
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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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47 comments
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lorna ward
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Dec 20, 2007 6:44 pm EST

PlEASE TELL EVERYONE YOU KNOW TO STICK TO THEIR LOCAL UTILITY.

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Addeme
Bloomfield, US
Dec 16, 2007 4:25 am EST

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

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lorna ward
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Nov 29, 2007 6:21 pm EST

Why was direct energy fined for forged contracts.

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Cameron Booth
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Nov 28, 2007 6:02 pm EST

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.

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lorna ward
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Nov 26, 2007 3:28 pm EST

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.

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lorna ward
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Nov 21, 2007 6:22 pm EST

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

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Annette Pickard
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Mar 08, 2007 6:41 am EST

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.

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