Direct Energy — things we should know as customers before signing with direct energy for natural gas
I am a first time homebuyer. My experience with Direct Energy has tought me a valuable lesson these past weeks. I want to share what I have learned with others, especially new home buyers in the Ottawa region.
This comment contains:
- links to reliable sources
- the actual laws that protect us customers
- Direct Energy's (DE) Early Exit Fees information
- my own personnal experience and the lessons I learned.
You can never be too informed when it comes to natural gas prices and the decisions you need to make. Here is a useful link about natural gas and the services available in the Ottawa region:
Brochure from Ontario Energy Board with basic information we should have as a customer : http://www.oeb.gov.on.ca/OEB/_Documents/Consumer+Brochures/brochure_natgas_200802.pdf
DIRECT ENERGY CAME TO MY DOOR
A sales representative from Direct Energy came to my door to sign us up for our natural gas account. I remembered seeing the Direct Energy sticker on our hot water tank. I also remembered seeing the Embridge sticker on our furnace. This indicated to me that the company was trust worthy and that I needed their service to continue using my hot water tank.
The sales representative explained the protection plans for natural gas and said that I needed to contact Enbridge to make sure that my account was set up. What then is the relation between Enbridge and DE? His answer wasn't clear, but I understood that they somwhow worked together. He then took out a bill sample that had the Enbridge logo on it. I assumed that both companies worked together.
He also told me, after I asked, that they were the only company from which we could buy natural gas. There, I had it : they were my only option, their sticker was on our hot water tank. I assumed it was the right choice. It was not.
DE, NOT MY ONLY OPTION?
I called Enbridge the next day to make sure that my account had been set up. I mentionned the Direct Energy salesperson and wanted to confirm with Enbridge the relationship between them and Direct Energy. That's when I learned that I could have bought my gas from Enbridge. I felt very angry that I was lied to.
A couple of days later, a sales rep. from another energy company (I forget the name) came to my door. They were offering the same service as Direct Energy. I did not hesitate to tell him that I had signed with Direct Energy and was lied to. This guy then took out the Direct Energy booklet I had received, with the Terms and conditions, and showed me the passage about Early Exit Fees.
EARLY EXIT FEES
The Terms and Conditions state that if you terminate a contract with DE before your time is up, you will be charged 200$ a month (plus other expenses) for the duration of that period. It also states that if you move outside Ontario or to an area where Direct Energy cannot service you, that you will be charged Early Exit Fees.
I called Direct Energy this week and the calling agent told me something completely different from what I read in the Terms and Conditions. She said that if you move outside the province, you need to provide DE with proof that you are moving at least 30 days before your moving date. They will cancel your contract without charging you any fees. If you are moving into an area where natural gas is not available (no gas lines), you need to notify them at least 30 days prior to your moving date and your contract will be cancelled without fees.
The salesperson that came to my door did not go into these details, he only mentionned that if I moved in Ontario, my account would be switched to my new address, and that if I moved outside the province, my contract would be terminated. He didn't mention any early exit fees. And I did not think to ask about them either.
I still do not know if I would be charged Early Exit Fees if I decided to move to another province or to a place where there is no service. It's the call center's representative's words againt the Terms and Conditions. I think the Terms and Conditions hold up better in court... so beware.
FALSE INFORMATION : A DE PLAN THAT DOES NOT EXIST
I wanted more information. I felt lied to. I had signed a contract too fast, thinking it was my only option. I then conducted a research, comparing what Direct Energy had to offer me and what Enbridge could offer.
I was deceived once again. The sales rep. from DE had told me that they would call me back within the month to confirm which plan we wanted fo our natural gas : a fixed plan with a fixed rate or a variable plan with variable rates. When I called Direct Energy to inquire about their varable plan, I was told that no such plan existed. They had stopped offering variable plans in 2005. This took me by surprised, seeing as they had a page on variable plans on their website: http://www.directenergy.com/EN/Ontario/RES/Pages/GAS/VariableRateFAQs.aspx
First I was actually told by a call rep. at DE that the variable plan was only available through an online offer, and that it was new. I decided to call back to talk to another representative who was very helpful. She even talked to her supervisor to make sure she was giving me the right information. The variable plans only exist for electricity, not for natural gas.
To top that off, she could see the rate I was given on my contract, 43.5 cents per cubic meter. She dais that I should have been offered a rate of 36.9 cents per cubic meter, because I am a new customer.
She offered to cancel the existing contract because I had been given false information and because my rate was too high. She said that she could sign me up for the new rate, in a new contract. I said I would think about it and call them back if I was interested.
CANCELLING A CONTRACT : OUR RIGHTS AS CUSTOMERS
#1. A contract (some exceptions, see below) is not active unless you reaffirm it. A representative from the company will call you back to reaffirm. If you do not reaffirm, your contract will not be activated.
Here is the law (Ontario Energy Board Act 1998, Section 88.9):
Once you sign a contract for the purchase of natural gas or electricity, as a general rule it will not remain in effect unless you confirm that you wish to accept the contract. This process is called "contract reaffirmation", and it applies in all but a few circumstances (see "When Reaffirmation Is Not Required", below).
The rules that apply to contract reaffirmation are as follows:
1. Starting on the 10th day after you have received a written copy of the contract, the marketer or retailer is permitted to contact you to ask you to reaffirm your acceptance of the contract.
2. At that point you may choose to reaffirm your acceptance of the contract, or you may choose not to do so. If you notify the marketer or retailer that you do not wish to reaffirm the contract, you cannot be required to pay any cancellation fees or penalties.
3. If you do not reaffirm the contract by the 61st day after you received a written copy, the contract will no longer be in effect as of that date. Again, you will then have no obligations under the contract as of that date, and you cannot be required to pay any cancellation fees or penalties.
4. If you reaffirm the contract and then decide at a later date to cancel it, you may have to pay a cancellation fee. The cancellation fee or the method by which it will be calculated must be stated in your contract.
Typically, the marketer or retailer will phone you to ask you to reaffirm your acceptance of the contract. If you reaffirm by phone, the marketer or retailer must record the phone call, and the recording must be given to you if you request it. You also have the option of reaffirming or refusing to reaffirm by giving written notice to the marketer or retailer.
Always ask for a reference number when you cancel a contract on the phone.
Summary of law : http://www.oeb.gov.on.ca/OEB/For+Consumers/Your+Energy+Options/Contracts+-+Consumer+Protection+Rules
Actual law : http://www.search.e-laws.gov.on.ca/en/isysquery/db272a39-ed3a-4f60-89ec-b96d800fbcb3/3/frame/?search=browseStatutes&context=
#2. Send a registered letter or a fax to the company, stating that you want to cancel all existing contracts with them. This tip was given to me by a customer rep. at the Ontario Energy Board and by a customer rep. at Enbridge.
Here is the law (Consumer Protection Act 2002), taken from the DE Terms and conditions:
If this Agreement was entered in person at a place other than our place of business, a trade show or an exhibition, the following excerpt from the Consumer Protection Act 2002 applies: "You may cancel this agreement at any time during the period that ends 10 days after the day you received a written copy of the agreement. You do not need to give the supplier a reason for cancelling during this 10-day period."
HOW I CANCELLED MY CONTRACT (10 DAY COOLING OFF PERIOD)
I cancelled over the phone with DE, wrote down the reference number. I also filed a complaint against the sales rep. that came to my door for giving me the wrong rate and the wrong information.
I also wrote a letter, in order to make sure that my cacelation would be treated. I added the reference number to the letter as well. Isent it by fax to 2 different numbrs given to me by 2 different rep. at DE. One of the numbers was incorrect, as I received a call the next day from an individual who had received my fax at his private residence. Luckily, I could rely on the other number to be correct. I also took no chance and sent an email to cancel.[protected]@DirectEnergy.com. I got an automatic response saying that it had been received.
UNDERSTANDING YOUR ENBRIDGE BILL
THE BOTTOM LINE
We as customers need to be more informed. Please keep in mind:
Enbridge is the utility. The bring the gas to your house. You will be billed by Enbridge (or your local utility) no matter who you decide to buy gas from.
Direct Energy is a marketer. They sell you gas. Enbridge will bill you on behalf of Direct Energy for the natural gas.
Know your rights as customers. If you have signed a contract and want to get out of it, send a letter of cancellation request within your 10-day coolling off period. Do not reaffirm your contract when the marketer (DE) calls you, if you do not want to contiue with them.
I hope my experience and my little investigation helps at least one person out there. We have to be vigilant and aware of these things. We have to be responsible consumers. I think I'm one step closer to it now.