A class action Direct Energy Services lawsuit alleges that rates wrongly increased due to deregulation of utilities and fraudulent pricing schemes.
In states with deregulated utilities, consumers have the opportunity to shop for better utility rates from energy service companies. Deregulated utilities have been implemented to encourage a competitive environment in which consumers get the best price for their utility services.
The deregulation of utilities has given rise to energy resupplier companies. These companies do not produce energy like a traditional energy supplier but instead but gas or electricity wholesale which it then resupplies to consumers.
Some consumers claim that energy resuppliers offer competitive fixed rates to their consumers only to change the rates later to a variable, fluctuating rate. According to recent allegations, these rate changes are undisclosed and break the deal companies have made with their consumers.
In regulated utility states, energy companies are required to justify their rate changes to consumers and state regulators. Deregulated states may provide more competitive potential, but the system can also open up the potential for unfair and deceptive business practices by energy service companies.
Multiple companies are under investigation by attorneys for potentially violated business laws with deceptive practices. Companies under investigation include American Power & Gas, Oasis Power, Palmco Power LLC, and Direct Energy Services. Consumers who were charged a variable rate by these companies may have been subject to deceptive utilities practices.
In September 2017, a class action Direct Energy Services lawsuit was filed over the issue in an Illinois federal court. In the Direct Energy Services lawsuit, plaintiff Chetty Sevugan claimed that Direct Energy Services LLC wrongfully increased rates for utilities.
According to the class action Direct Energy Services lawsuit, the company lured consumer in with a “teaser rate” that is often lower than other local utility rates. However, this rate reportedly expired after a few months and is replaced with a variable rate reflecting “market-related factors”.
“Direct Energy’s business model is simple: after the teaser rate expires, it charges exorbitant rates that are not based on market-related factors, namely the rates that other retailers and energy customers’ incumbent utility providers charge for natural gas and electricity and wholesale costs,” the Direct Energy Services lawsuit claimed. “As a result, Illinois consumers are being fleeced millions of dollars in exorbitant charges for energy.”
In his class action Direct Energy Services lawsuit, Sevugan seeks to represent a Class of Illinois Direct Energy consumers who were charged a variable rate for utilities since Aug. 8, 2011.
Sevugan claims that Direct Energy Services‘ actions constitute breach of contract, breach of implied covenant of good faith & fair dealing, and unjust enrichment, and are in violation of Illinois’ Consumer Fraud and Deceptive Business Practices Act. The class action Direct Energy Services lawsuit seeks monetary relief, restitution, injunctive relief, compensatory damages, punitive damages, court costs, and attorneys’ fees.
The Class Action Direct Energy Services Lawsuit is Sevugan v. Direct Energy Services LLC, Case No. 1:17-cv-06569, in the Untied States District Court for the Northern District of Illinois.
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You may qualify to file an energy service company class action lawsuit if you bought utilities through a deregulated energy supplier such as:
- Constellation
- Reliant Energy
- Verde Energy
- Spring Energy
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9 thoughts onDirect Energy Services Lawsuit Claims Company Wrongfully Charged Variable Rate
Please add me to this, my father signed up with direct energy when i was a kid, i am now 32 and he passed away when i was 17, and my mother has been through multiple battles with cancer, a brain tumor, and a stroke. now that i am taking over i am noticing direct energy has constantly been charging us a higher rate, almost 2x the amount we should be paying
Hi! I cancel the service with Direct Energy on 2016 when I moved to the new house, I live in Maryland, they told me I cancel only the gas, but it’s been a while and I am sure I wanted to cancel everything. Then in 2018 my contract expired, and then they charged me a variable rate and I had this astronomical bills, I thought it was PEPCO, but it was them charging me the triple that PEPCO charged me. Please add me, I don’t this people to fool anyone else, they are stealing money from people. I just cancel yesterday the service, when I realized what was happening, let’s see if it’s cancel for good. Thank you for your time reading this
Please add me to this law suit very upset Gateway Direct energy took at least 10,000.00 over the course of 12 years, I was working my husband was sick for 10 years needing a liver transplant. To make life easy for myself I put my billing on a budget and switched to e bills I truly was not aware of the money I was paying over and above the cost of NJ Natural gas charges till recent. I’m sadden that this is something I was taken for.
I have duke energy in ohio I don’t need or want any other energy company but yet there is a direct energy on my bill that I never signed up for for direct energy called and had it removed in 2019.i have the cancelation number.did not see the charges on my duke bill since I cancelled but somehow it is back with no ones authorization. I also had nrg that was cancelled also,so I had two companies billing for electric one for gas and duke energy for both. ny duke bill was on budget billing with the other two companies that doubled my bill. I could not get out of budget billing until I paid it off, so I have paid thousands of dollars for services I did not need nor authorized. I have called so many times but always get the run around and would like help.
I moved from Maryland in 2013 to Ga. Now I decided to relocate to Delaware. All the old flood gates open starting I owe an outstanding Electric bill with BG&E in Md for $580 . 7 years ago I complain these different energy companies are frauds. I never signed with them. My electric company gave phone numbers to call. No answers. Back fighting my company for not investigating. Pamlco, Direct, and Clearview energy companies are on my Bill’s for 2013. HELP
I found out today that Direct Energy has been charging me 92 cents vs Dukes 37 cents and 13 cents vs Duke’s 6 cents. I don’t recall signing up for anything except even billing from Duke. I was tricked and robbed by paying 2 and a half times what I should have paid. Why does Duke facilitate this scam? I pay the money to Duke. Please add me to any class action against Direct Energy or Duke.
I received a letter of collection for direct energy for Oct. 2018 when I never received a bill from them and further more I have never been behind in any of my bills. When I received that bill from the credit bureau they told me I had to receive a letter from direct energy because they have my address. Excuse me but my address is the billing address.
I was tricked by direct energy please add me
Please add PEAK 6 POWER To the lawsuit
1) I did not realize I was signing up for Peak 6 Power. I thought I was going to be sent an application (my fault for not reading the fine print :), 2) my last two bills are MORE THAN DOUBLE what they would have been had I remained with PG&E
I have been on the phone alternately with PG&E and Peak 6 Power trying to cancel the contract. I was told that it won’t be canceled until Sept. 1 and each is saying the other is responsible for when the cancellation is effective. I want it canceled effective when I called in, which was mid-summer and I want a refund for this over-billing and this contract w/ Peak 6 Power terminated effective immediately.