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THE CITY REBORN FROM THE ASHES OF AMERICA'S MOST DISASTROUS FOREST FIRE
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Customers Gas Faces State Unfair Billing, Fraud Charges

Issue Date: March 1, 2017

Customers Gas Service of Amberg, LLC is being sued by the State of Wisconsin for alleged violations of the state's consumer protection laws in connection with propane sales to its Wisconsin customers "during the polar vortex winter of 2013-2014." Charges include failure to deliver gas to customers who had prepaid and over charging for gas they did deliver, contrary to contracted agreements.

Action is pending before Judge David Miron in Marinette County Circuit Court Branch I on charges filed by the Attorney General Brad Schmiel and Assistant Attorney General Gwendolyn Cooley on Dec. 22, 2016 at the request of the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP). A related summons was filed in the Marinette County Clerk of Courts office on Dec. 29.

As of Tuesday, Feb. 28, no dates for any possible future proceedings had been set, and the Clerk of Courts office had not been notified that the summons had been served.

The defendants had been given 20 days to answer the complaint after service, but reports are that the Wisconsin Department of Justice has been unable to reach the owners of Customers Gas, which is now out of business and appears to no longer have assets.

The complaint alleges that during that frigid winter of 2013-2014, Customers Gas ""responded to the propane shortage by unfairly charging propane customers above their contracted price and falsely misrepresenting that it would supply consumers with their propane needs."

According to the complaint, even when it did supply some propane to consumers, Customers Gas failed to deliver the contracted amount, forcing consumers to endanger their homes.

With propane in extremely short supply when it was available at all, many residents of northern Marinette County who had no alternate forms of heat, including some who had prepaid Customers Gas for their 2013-2014 heating season fuel, were forced to leave their homes and find shelter elsewhere for a time. Some homes reportedly were damaged from freezing.

As background, the complaint states that Consumers Gas, located at W8975 Smith Road in Amberg, began selling propane heating fuel to Marinette County consumers in 2000. Principal officers of the company were Terrance and Renee Price.

From 2000 to 2014 the company sold nearly 1,000,000 gallons of propane each year to approximately 3,000 residential and commercial consumers. They sold through three different contracts, "Pre-Buy" "Budget," and "Routed/Scheduled Delivery."

Pre-Buy consumers purchased propane in advance at set price per gallon. Budget consumers purchased at a set price per gallon, but paid for the contract on a month-to-month basis. Routed/Scheduled Delivery customers purchased on an as-needed basis at market prices. The firm delivered propane to Pre-Buy and Budget consumers on either a "Scheduled" or "Will Call" basis.

From May through December of 2013 Customers Gas sold prepay and budget contracts for the 2013-2014 heating season. The contracts stated that Customers Gas would provide a set amount of propane at a secured price, and would deliver the contracted amount throughout the heating season.

However, Customers Gas did not secure the needed amount of propane to fulfill its contracts, but bought instead on an as-needed basis from bulk distributors throughout the winter months. Ultimately, the firm sold significantly more propane than it was able to deliver to its pre-buy customers for the 2013-2014 heating season.

Beginning in December of 2013 Customers Gas failed to deliver propane to customers as agreed in their pre-buy and budget contracts.Due to shortages at its Amberg facility, the firm would deliver only limited amounts of propane to pre-buy customers if the consumers' propane tanks were less than 20 percent full.

"As a result, consumers began to worry whether they would have sufficient propane to make it through the winter," the complaint states. When temperatures for the area went as low as 18 degrees below, consumers began rationing their propane use, with some lowering thermostats to 50 degrees. "This temperature put consumers at an elevated risk for pipe freezing and other cold-related damage," the complaint says.

Consumers called repeatedly to ask when propane would be delivered, and Customers Gas informed them it did not know when, if at all, it would be able to deliver propane and that they should try to find another vendor.

When Customers Gas was able to deliver propane it would sometimes charge a delivery fee in excess of their contracted price, and that fee was not contained in the contract.

"When consumers complained of freezing pipes, Customers Gas offered to sell them electric heaters in addition to their contract price," the complaint states.

When Customers Gas failed to deliver, pre-buy customers began requesting refunds of their advance payments. Customers Gas refused to refund contracts on oral request and required consumers to send requests in writing, after which the consumers were told he company would send refunds within 30 to 45 days, but ultimately, only a few of the consumers received refunds.

The complaint goes on to state that in January of 2014 Customer Gas principals Terrance and Renee Price used the company credit card to finance a trip to Pine Mountain Sport Recreational Park and used Customers Gas funds to pay off Renee Price's personal credit card account. "This was at the same time that Customers Gas failed to make propane deliveries and make refunds to pre-buy consumers," the complaint declares. It states the company never fully performed its Pre-Buy and Budget contracts, nor did it fully refund consumers their advance payments.

DATCP received 277 complaints from consumers regarding their contracts with Customers Gas. This, the complaint states, represented more than half of the total complaints they received against all Wisconsin propane dealers that year.

Formal charges against Customers Gas include one count of violating statute 100.195, "unfair billing for consumer goods and services," and one count of "making fraudulent representations in violation of statute 100.18."

The complaint states that on at least two occasions, Customers Gas charged budget consumers a higher price per gallon for their propane than had been agreed to in their contracts.

Jacky Moeller, 62, signed a budget contract for propane at $1.74 per gallon on Nov. 18, 2013. Her monthly payment on the budget contract was $158. In February of 2014 Customers Gas delivered 100 gallons of propane and charged her $3.99 per gallon.

Carmen Pindozzo, over 62 years of age, contracted to pre-buy propane for $1.49 per gallon on Dec. 30, 2013, after Customers Gas was already aware of its propane shortage, the complaint states. In January of 2014 they charged her $2.99 per gallon for 100 gallons, plus an additional $9.95 delivery charge that was not in the contract.

The complaint states that Customers Gas never refunded either Moeller or Pindozzo the difference between their contracted price and the price they ultimately paid for he propane.

The state is asking that the company be enjoined from further violations, and be ordered to pay restitution to any person who suffered monetary loss because of the acts and practices involved and to pay expenses incurred by the Department of Justice (DOJ) and DATCP for investigating and prosecuting the case, in addition to fines for specific violations and any other penalties the court may want to impose.

The company could be fined up to $200 for each of the fraudulent representations and up to $10,000 for each unfair billing violation in addition to penalty assessments and surcharges.

Each billing at a price higher than the price agreed upon in the pre-buy and budget contracts carries a forfeiture of not less than $100 nor more than $10,000.

The complaint states that Customers Gas, through its employees or agents, made false, deceptive, and misleading statements and representations to solicit sales when it falsely represented its ability to provide propane for the heating season, failed to secure the amount of pre-buy and budget propane that it contracted to sell, and failed to hold the funds necessary to refund customers upon failure to perform its contracts.

Each false, deceptive and misleading statement or representation made during the time period constitutes a separate violation, each carrying a forfeiture of not less than $50 nor more than $200.

The summons filed in Marinette County on Dec. 29 ordered Customers Gas to submit a proper legal response to the complaint within 20 days.


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