Attorney General Schwalb Issues Alert to Warn DC Residents About Energy Company Scams

Multiple Companies Are Using Deceptive Tactics to Pressure or Trick DC Consumers into Switching Energy Providers, Then Charging Higher Rates


Attorney General Brian L. Schwalb today issued the below consumer alert to warn DC residents about third-party energy companies using deceptive and potentially illegal sales tactics to pressure or trick DC consumers into switching energy providers. These third-party energy companies also often charge more for energy than Pepco or Washington Gas.

“District residents should be on high alert if someone asks them to switch energy providers as multiple third-party energy companies are using illegal pressure tactics to get DC residents to sign predatory contracts,” said Attorney General Schwalb. “These scams use a variety of tricks to lure customers in with promises of lower utility bills and then trap them into paying outrageous rates long-term. DC residents should report any deceptive or high-pressure sales tactics to our Office of Consumer Protection.”

CONSUMER ALERT: THIRD-PARTY ENERGY COMPANY SCAMS

Has anyone approached you asking you to switch energy suppliers? The Office of the Attorney General (OAG) has learned of multiple third-party energy companies using sales tactics that we believe are deceptive and illegal, and pressuring or tricking DC residents into signing contracts. These companies also frequently charge customers higher prices for energy than Pepco or Washington Gas.

What is a third-party energy company?

A third-party energy company is any company selling electricity or gas that is not Pepco or Washington Gas, which are the regulated utilities. Pepco and Washington Gas customers pay a regulated “standard offer of service” rate. The Pepco or Washington Gas standard rate is often significantly less than the rate third-party energy companies charge.

District residents may choose to buy energy from providers other than the regulated utilities, and third-party energy companies may reach out to you to encourage you to switch. These companies may visit your home, call you, mail you brochures, or attend public events (like local farmers’ markets). They may also offer incentives, like free gift cards or “signing bonuses,” to persuade you to switch services.

What should I look out for?

OAG has received reports of third-party energy companies using deceptive tactics and attempting to pressure or trick DC residents into switching their energy suppliers.

Here are some tactics to watch out for:

  • Salespeople who ask to see your utility bill and claim to be from Pepco, Washington Gas, or DC government. Pepco, Washington Gas, and DC government will NEVER send a representative to your door asking to check your bill.
     
  • Mailers that are labeled “urgent” or mailers that look like they are from Pepco or Washington Gas when they are not. Check the return address on envelopes to see whether the mailer was actually sent by Pepco or Washington Gas. Read letters carefully before filling out any attached forms.
     
  • Language implying that you are “obligated” to choose an energy provider. This is false – you are NOT obligated to choose an energy provider. Residents who do not switch providers stay automatically enrolled by Pepco and Washington Gas, the regulated utility companies. Because Pepco and Washington Gas are regulated, their customers often pay lower rates than the rates charged by other companies.
     
  • Salespeople claiming that switching electricity suppliers will make your bill cheaper. While the initial bill after switching electricity suppliers may be cheaper, a higher variable rate can kick in later and can drastically increase your bill. If a third-party energy salesperson makes claims about savings or lower rates than Pepco or Washington Gas, always ask:
     
    • How long will that cheaper rate remain in effect?
    • What is the rate after any introductory offer or discount period?
    • Is this a term contract? How long does the contract last?
    • Is there a fee or penalty for canceling? What is it?

OAG has also received reports of salespeople skipping important and necessary steps when asking residents to switch energy companies. By law, salespeople must:

  • Tell you what company they represent and that they are selling a service. They must ask for your permission before beginning the full sales pitch.
     
  • Present photo ID clearly stating their name and the company’s name.
     
  • Allow customers to complete Third-Party Verification Calls by themselves—and not in the presence of the salesperson. “Third-Party Verification Calls” are over-the-phone questionnaires that confirm that you intend to switch energy suppliers. Salespeople should NOT be present during this call and should NOT tell you how to answer questions.

How can I report deceptive or high-pressure sales tactics?

If you have witnessed these sales tactics or you believe a third-party energy company is breaking the law to make sales, please call OAG’s Office of Consumer Protection at (202) 442-9828, email a complaint to consumer.protection@dc.gov, or fill out an online form. We encourage you to report any deceptive sales or marketing tactics you have experienced or witnessed—even if you did not sign a contract or switch energy providers!

What should I do if I want to cancel my contract or switch providers?

Customers who switch energy providers have a right to cancel their contracts free of charge within 3 days of switching. After this period expires, customers can still cancel, but there may be fees for canceling early, depending on the terms of your individual contract. Contact your third-party supplier directly or contact Pepco or Washington Gas.

If you need further assistance to cancel, contact the Office of the People’s Counsel by filing a complaint or calling (202) 727-3071, or the DC Public Service Commission by filing a complaint or calling (202) 626-5120.

More Information 

Additional information on third-party energy suppliers is available here:

Contacts – Get Help! 

Report scams or unfair business practices to OAG’s Office of Consumer Protection:

File complaints about third-party energy suppliers with the Office of the People’s Council and the DC Public Service Commission: