Settling a case involving alleged deceptive marketing tactics to lure Massachusetts residents into costly contracts for electricity, Viridian Energy, LLC, has agreed to pay $5 million to settle allegations of a competitive electricity supplier in Massachusetts, according to Attorney General Maura Healey.
Healey’s office alleges that Viridian, through door-to-door sales, direct mail, and family-and-friend-based “network marketing,” engaged in various deceptive and unfair sales tactics. In a filing Friday in Suffolk Superior Court, it also alleges that consumers who switched to Viridian ultimately paid more for electricity than if they had stayed with their utility.
“This company sent salespeople to go door-to-door and trick residents into paying much more for their electricity,” Healey said Wednesday. “Our settlement requires Viridian to pay back millions of dollars they owe customers for their deceptive tactics and false promises. We will continue to go after competitive electricity suppliers who violate our laws.”
The attorney general office has received hundreds of residential consumer complaints concerning unfair and deceptive conduct of competitive electricity supply companies.
According to the settlement, Viridian contracted with independent sales agents and instructed them to tell potential customers — including friends and family members — that signing up with the company would save them money over time. In fact, customers paid more than they would have if they had stayed with their electric utility company’s basic service.
The attorney general’s office also alleges that a third-party marketer hired by Viridian to market and sell its electricity supply door-to-door engaged in widespread misconduct, including falsely promising savings, falsely representing an affiliation with the customer’s utility company, switching customers to Viridian without authorization, and other aggressive marketing tactics.
Under the terms of the settlement, Viridian will pay a total of $5 million, including $4.6 million to provide restitution to affected customers.
The remainder of the payment will go toward offsetting the cost of the Viridian investigation; creating a fund for future enforcement cases the office brings against competitive electric suppliers; and the state’s General Fund.
Viridian also has agreed not to market its electricity supply door-to-door in Massachusetts for the next two years, in addition to making several other changes to its marketing practices.