Are Energy Resellers a Scam?

Energy resellers claim they can save customers money on thier utility bills, but customers are saying otherwise. Are Energy Resellers a Scam? - My Life, I Guess...
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A few years ago, shortly after my now-husband and I first moved in together, we had a representative from Summitt Energy come knocking on our door one evening. Since we had brand new utility accounts, we both assumed that this rep was there to do some sort of verification.

But that wasn’t the case.

The rep quickly introduced himself as an employee of so-and-so energy. He showed me an official-looking ID card that matched the logo on his jacket. So when he asked to see our most recent hydro and gas bills, it didn’t really dawn on me that this wasn’t a routine visit from the utility company. It was a sales pitch – and potentially a scam.

For those of you that don’t know, Energy Resellers or Energy Retailers are basically door-to-door wholesale salespeople. They sell natural gas and electricity at a fixed rate.  The idea is that the fixed rate will save you money. But of course, if it sounds too good to be true, it probably is.

As the rep looked over our bills, he started talking about a huge discount that he could offer us. Neither of us knew much about energy resellers and his sales pitch was so good that we weren’t suspicious or alarmed.

I don’t recall the exact figures he gave, but the proposed savings were significant enough to pique my interest. And after about 10 minutes or so, I was foolishly signing his forms.

However, I didn’t know I was signing a contract.

I was lead to believe that I was simply signing a “disclosure statement”. Something to verify to his managers that he had gone over all the details with me. This was reinforced when he placed a “quality assurance” call to his company. I was asked to speak to a woman to verify that yes, the guy had on an ID bag, and yes, the guy read over the disclosure forms with me, and so on.

After I had hung up the phone, we had to wait to for someone from his company to call back.

As the rep was standing in our living room chatting away with me, my husband finally started to become a little suspicious of what was going on.

Why did I need to sign anything at this point? Who did I just talk to on the phone? What were they calling back about?

He quickly Googled “Summitt Energy” and it was ALL red flags.

So he asked the rep why all the search results were warning that this was a scam.

The rep quickly dismissed this, saying that the negative feedback was “just from bloggers” (how dare he!) and that we should check out more reputable sites, such as the Better Business Bureau.

So we did – although, not until after he had left. But sure enough, us bloggers were right. The company was not accredited and had numerous complaints made against them.

Once the sales rep left, my husband and I spent the rest of our evening researching energy resellers and reviewing the paperwork that he had left us.

Did We Just Fall for a Scam?

A common complaint that kept popping up was that the representatives from reseller companies like Summitt Energy misrepresented themselves. Most people (myself included) were led to believe that the reps either work for or are affiliated with the hydro and/or gas company. In our case, the rep kept saying that our utility companies actually purchase gas/energy through his company. So by signing up with them, we’d simply be cutting out the middleman. That sounds like a strong affiliation to me, doesn’t it?

The more disturbing complaint was that by signing up with an energy reseller, customers actually ended up paying more.

We decided not to take our chances.

The first thing I did the next day was call Summitt Energy and cancel any contract that was opened under my name. After I hung up the phone, I emailed them to get a confirmation in writing that I did not have to pay a cancellation fee and that my electricity and natural gas services would continue without interruption. I also phoned my utility companies to make sure nothing changed on my accounts with them.

We were lucky that the cancellation process was just that easy for us. A lot of people weren’t so lucky. Numerous requests to cancel accounts went unanswered. Or customers were told they had to pay outrageous penalty fees in order to get out of their contracts.

But sure enough, about a year later, we got another knock on our door one evening. This time I was better prepared, and immediately asked if they were an energy reseller. The rep sort of grinned but didn’t confirm anything. I politely said “no thanks!” and shut the door.

In January 2017, new rules came into effect under the Ontario Energy Board regarding energy resellers and energy retailers which help to further protect consumers in Ontario. But it’s sad that it’s still happening and that unsuspecting people are being deceived.

I feel like I’m pretty savvy when it comes to spotting potential scams, but (nearly) fell for the oldest trick in the book.

So please don’t be like me. If someone comes to your door, unsolicited, and tries to sell you something or tries to get you to sign something, DON’T DO IT.

If you are interested, ask for them to leave information so that you can do your homework first. It could save you from falling for a scam.

YOUR TURN: Do you have any experience with energy resellers? Have you ever fallen for a scam?


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Amanda is the owner and creator of My Life, I Guess... a personal finance and lifestyle blog that started back in 2013. She strives to keep the "person" in personal finance by writing about money, mistakes and making the most of it.

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