Michigan Attorney General Granholm urges Energy America to revamp marketing practices

LANSING, Mich., May 6, 2002 — Attorney General Jennifer M. Granholm Monday announced that she expects Energy America, a Toronto-based natural gas provider, to revamp the way it markets natural gas to customers in Michigan.

Granholm has been negotiating with the company since March to bring its door-to-door marketing tactics into compliance with Michigan law. Granholm maintains that Energy America’s marketing practices violate state law, including the Michigan Consumer Protection Act.

Though the company’s decision to terminate and revamp its marketing activities is not part of a formal agreement with her office, Granholm will continue to insist that the company resolve any outstanding consumer complaints and provide refunds for any Energy America charges which were not fully disclosed to, and authorized by, a customer.

The company announced on Friday that it will suspend its door-to-door marketing operations in Michigan while it develops more comprehensive training programs and quality controls for its sales agents.

The company announced that it will work with Granholm and the Michigan Public Service Commission to ensure that a new, corporate-managed, marketing program follows Michigan law.

Granholm said: “Consumers in Michigan have been outraged by Energy America’s tactics — and rightly so. Being the largest of the new gas suppliers in the Michigan market doesn’t release Energy America from its responsibility to follow the law. We heard Michigan’s consumers’ complaints loud and clear and took them to the company — I’m glad they’re listening.”

The Attorney General’s office has responded to more than 675 complaints against Energy America since Michigan’s gas choice program began in 1998. Following a rash of similar complaints about the company’s marketing operations in early 1999, Granholm required the company to institute a real- time confirmation system to ensure that customers were immediately contacted to confirm their wish to switch their natural gas service to Energy America. Granholm noted that complaints stopped for nearly two years following implementation of the confirmation system but have spiked again this year.

Granholm said that consumers have logged more than 130 complaints with her office this year alone regarding Energy America’s marketing practices. The company employs independent contractors who sell its natural gas services door-to-door. Consumer complaints range from failure of sales staff to properly disclose the identity of the company he or she represents to forgery of customer signatures on orders to switch from a prior gas supplier to Energy America.

Granholm’s staff — along with representatives of the Michigan Public Service Commission — have met with Energy America corporate officials in recent weeks to negotiate a resolution to all consumer complaints and to ensure compliance with the law going forward. The suspension of the marketing program is not expected to affect current Energy America customers.

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