Chicago, IL — Direct Energy Services, LLC has agreed to a $12 million settlement with the state of Illinois, resolving accusations of deceptive business practices. The lawsuit, initiated by Illinois Attorney General Kwame Raoul, claimed that the company engaged in misleading enrollment practices and charged customers excessively high electricity rates.
The legal action asserted that Direct Energy violated the Illinois Consumer Fraud and Deceptive Business Practices Act by enlisting customers without their explicit consent and, at times, billing them at rates more than 230% above the default utility rates. This settlement marks a significant victory for consumer protection under Attorney General Raoul’s tenure.
As per the terms of the settlement, Direct Energy is barred from enrolling any new customers in Illinois for the next 12 months and is subject to a permanent injunction. This injunction prohibits the company from enrolling clients without their consent, falsely claiming potential savings, misrepresenting affiliations with public utilities or government bodies, deceptively obtaining consumer account details, incorrectly promoting “price protection,” and failing to adequately disclose rate changes and new contract terms.
The $12 million compensation pool will provide reimbursements to customers who were supplied electricity by Direct Energy between 2013 and April 2025. The reimbursement amounts will vary, based on the individual electricity consumption during the period each customer was signed up with the company.
This is not the first instance of Attorney General Raoul successfully litigating against third-party utility companies over deceptive practices. Previously, in December 2024, his office secured a $3.5 million judgment against Palmco Power IL, which did business as Indra Energy. Additionally, in September 2024, a $10 million judgment was won against Teleperformance Colombia SAS, TPUSA Inc., and Teleperformance SE for similar violations.
The pursuit for fair utility practices continues as Raoul also filed a lawsuit against Spark Energy LLC and Spark Energy Gas earlier in January. The case, which is yet to be heard, accuses Spark Energy of employing fraudulent and deceptive tactics to inflate customer bills significantly.
These legal battles underscore the ongoing efforts by the Illinois Attorney General’s office to clamp down on fraudulent practices in the utility sector, striving to ensure that consumers are not misled or overcharged. These enforcement actions reflect a broader commitment to uphold consumer rights and transparency in business operations within the state.
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