Avoiding and Terminating Expensive Energy Contracts: Protecting Consumers from Energy Re-billers

1. Energy Re-billers Avoiding and Terminating Expensive Energy Contracts

2. What are energy re-billers? • Energy re-billers are companies that purchase electricity and natural gas from producers, and then sell them to consumers. • Some examples of energy re-billers that operate in our area are Universal Power, Universal Energy, Just Energy and Ontario Energy Savings Co.

3. How do they operate? • Energy re-billers often send salespeople door-to-door to try to convince consumers to sign contracts with their companies. • The sales tactics of the door-to-door salespeople can be very aggressive. • The sales tactics of the door-to-door salespeople often include persuading the consumer that they can save money on their electricity or natural gas by signing a contract with them.

4. Why is this a concern? • Unfortunately, once consumers have signed a contract with an energy re-biller, they often find that their monthly bills are significantly higher as a result. • The contracts with energy re-billers can have a term of up to 5 years. • Often, the energy re-billers will not permit consumers to cancel their contracts without paying an expensive cancellation fee.

5. Why is this a concern? • Since many of the consumers who sign contracts with energy re-billers are members of low-income households, the increased utilities costs can be a real hardship. • Low-income households also often cannot afford to pay the cancellation fee, so they are stuck in the expensive contracts.

6. What can consumers do about this? • The best defence against getting caught in this expensive situation is to not sign a contract with an energy re-biller in the first place, without first seeking some legal advice to ensure that you understand the contract. • Consumers should be advised against signing anything at their home. They should be advised to ask for a copy of any contract to show to a legal worker before signing.

7. What can consumers do about this? • If a consumer has recently signed a contract with an energy re-biller, they may be able to cancel the contract. • Energy re-billers are required to get confirmation of any contract 10-40 days after the consumer signs the contract. Energy re-billers will often do this by telephone. • Consumers can cancel the contract that they have recently signed by refusing to confirm the contract 10-40 days after signing.

8. What if someone has confirmed a contract? • If a consumer has already confirmed their contract with an energy re-biller, it still may be possible to terminate their contract without paying a termination fee. • If the energy re-biller has engaged in any unfair marketing practices, such as misleading statements or promises, this may form a basis for cancelling the contract. • The legal workers at the Grey-Bruce Community Legal Clinic can assist with these terminations.

9. How can a contract be terminated? • Many energy re-billers have policies in place to allow customers who are recipients of social assistance or who are seniors to terminate their contracts without penalty. • The legal workers at the Grey-Bruce Community Legal Clinic can assist with obtaining these terminations.

10. How can a contract be terminated? • Where a customer is not on social assistance nor is a senior, the contract may still be terminated based on violations of the Consumer Protection Act and the Ontario Energy Board Act on the part of the energy re-biller. • The legal workers at the Grey-Bruce Community Legal Clinic can assist in determining whether there are legal grounds to terminate a contract and can assist with termination.

11. Important Deadline • IMPORTANT: For termination under these Acts, there is often a one-year deadline from the time of starting the contract. It is therefore important to refer any persons who may want to cancel a contract with an energy re-biller to the Grey-Bruce Community Legal Clinic as promptly as possible. • NOTE: this one-year deadline does not apply in cases where the contract is being terminated on the grounds that the consumer is on social assistance or a senior.

12. For Further Information: • Feel free to contact the Grey-Bruce Community Legal Clinic with any questions regarding Energy Re-Billers. • Our legal workers are available between 9:00 and 11:00 every weekday morning to provide legal advice over the phone or to drop-ins.