An electricity supplier will pay $5 million to settle claims of deceptive marketing and sales tactics that resulted in consumers being overcharged, according to state Attorney General Maura Healey’s office.
In addition to the settlement payout announced Wednesday, Viridian Energy LLC of Norwalk, Conn., agreed it would not market its electricity supply door-to-door in Massachusetts for the next two years and that it would change some of its marketing methods.
Consumers in Massachusetts have the choice of getting their electricity through licensed suppliers instead of directly from state-regulated utilities such as Eversource and National Grid.
Viridian “engaged in various deceptive and unfair sales tactics,” through its door-to-door sales, direct mail, and family-and-friend-based marketing push, according to the attorney general’s office, which said it has received complaints from consumers about the company since 2008. People who switched to Viridian ultimately paid more for electricity than they would have had they stayed with their original utility, Healey’s office said.
“Our settlement requires Viridian to pay back millions of dollars they owe customers for their deceptive tactics and false promises,” Healey said in a statement.
Viridian is alleged to have contracted independent sales agents and instructed them to sign up customers, including friends and family members. A third-party door-to-door marketer hired by Viridian is also alleged to have “engaged in widespread misconduct,” including falsely promising savings, falsely claiming to be affiliated with residents’ utility companies, switching customers to Viridian without authorization, and “other aggressive marketing tactics,” Healey’s office said.
The bulk of the settlement, $4.6 million, will provide restitution to customers, while the rest will cover costs of the investigation and be used to set up a fund for future enforcement cases against competitive electric suppliers.