Fox CT Investigates: CT energy company accused of misleading customers

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STAMFORD- You might have heard CL&P's electric rates jumped 26 percent last month in Connecticut.

So is it time to shop around for an alternative electric provider?

One of them promises to save you money while you save the environment, but it may be promising more than it can deliver.

The company, called Viridian Energy, is dealing with a civil lawsuit in Maryland and is the subject of more than 100 complaints in Connecticut since 2012. So Fox CT took a closer look.

You can read the entire civil suit filed in Maryland against Viridian here

In the company's promotional videos posted on YouTube, sales associates are often heard saying, "Generation V!"

"V" is for Viridian--a Stamford-based alternative electric company.

If associates sign up enough new customers, they can get a free car, a trip to the spa, or enter "Millionaire's Circle"--a group of associates who've earned $1 million or more by selling Viridian's energy plans to friends and family. Videos show the company's president handing sales associates the keys to brand new Audi sports cars and Teslas. Associates are also shown at glow-in-the-dark dance parties, poolside sipping drinks, and talking about how life with Viridian is like living "a lifestyle of the rich and famous."

But could it all be at the expense of customers like Kelly Carney from Guilford, who owns KC's Pub? She now believes the company's perks and big profits might come from overcharging customers.

"I realized that my bill was just extremely higher than it was before," Carney told Fox CT. Her bill was thousands of dollars higher.

So Carney filed a complaint with the State of Connecticut's Public Utilities Regulatory Authority, also known as PURA.

You can view Kelly's full complaint here

Six months after she signed up for a low promotional rate of 6.99 cents per kilowatt-hour she was supposed to receive a letter giving her three options: the chance to renew at a fixed rate of 8.99 cents per kwh, to cancel, or to go to a variable rate.

The problem is, Carney says she never got that letter. She says her account automatically went to a variable rate of 17.49 cents per kwh, which was 2.5 times her prior rate of 6.99 cents per kwh.

In the month of July 2014, for example, Carney's restaurant used 12,598 kwhs of electricity at 17.49 cents per kwh; the total charge was $2,200. Had she been at the 8.99 cent rate, she would have only been billed $1,130 that month.

She said she didn't even notice the changes until a couple billing cycles went by, and then couldn't reach the company to cancel.

"Over an hour on hold. I got the run-around, passed to several different departments. One time I was just hung up on," said Carney.

But the worst of it, said Kelly, was that the higher variable rate continued for six more months while she struggled to cancel, totaling over $9,000 in extra charges.

"That kind of money, is a lot, to a small business," said Carney.

It can be a lot for homeowners too.

PURA received more than 100 complaints from Viridian customers since 2012, including Kelly Carney's complaint. Nationally, the Better Business Bureau's received 172 complaints against Viridian in the same time span.

In 2013, a now-shuttered former sister company of Viridian called Power Power shelled out more than $41,000 to Connecticut customers with rate disputes to settle a case brought by PURA.

Connecticut's Better Business Bureau spokesman, Howard Schwartz, has been tracking Viridian. "The type of pattern we saw was complaints about electricity rates doubling and tripling and customer wait times on the phone in the area of one hour, which is unacceptable by any standards," said Schwartz.

In 2012, the state of Maryland fined Viridian $60,000 for "false and deceptive marketing practices." Maryland's utility regulator told Fox CT they've received 125 complaints about Viridian since the start of 2014.

Then, just two months ago, also in Maryland, a class-action lawsuit was filed against Viridian and it's parent company, Crius Energy. The suit claims Viridian uses a "fraudulent and deceptive bait-and-switch sales model" and that Viridian associates "form a retail pyramid" that yielded the company a 30 percent profit margin in 2014, to the tune of $33.7 million.

It goes back to those "life styles of the rich and famous" videos that Viridian uses to attract new salesmen.

According to Viridian, there's 1,300 independent sales associates in Connecticut, and 25,000 spread nationwide across the 16 states Viridian operates. Each sales associate has signed up about 14 customers for Viridian electricity, according to the company.

But to get one of the Audis or Teslas? Viridian said associates must sign up 6,000 customers each. So it appears only those at the top are reaping the big rewards and appearing in those fast-paced videos.

Viridian President Meredith Berkich helps lead the company's annual conferences, travels overseas, and manages the day-to-day work shown in Viridian's promotional YouTube videos, many of which she appears in.

"We're the good guys. We are absolutely the good guys and I wish you'd find out more about that," said in an interview with Fox CT.

Despite a pending civil case in Maryland, these "good guys" say they've moved beyond the hundreds of complaints.

"How I would characterize any complaints that come is that they're addressed and that we're vindicated. Viridian has been vindicated, and we will be vindicated we believe, in this one that's on the table right now," said Berkich.

When asked if customers could end up spending more money after signing up for Viridian, Berkich said, "So, that's a good question. I think that right now in this environment, most experts point to the fact that energy prices are going to rise."

Viridian did go from an "F" rating with the Better Business Bureau to an "A+" after closing the majority of complaints and vowing to improve customers service. But the BBB told Fox CT Viridian only had to promise improved customers service in the future for the company's rating to rise.

"We are in the business of making our customers happy and providing value--we have a lot of very happy customers and we're providing great value to them," said Berkich.

Kelly Carney would disagree.

She wants a refund and apology, as would the 10,000 members of the class-action lawsuit against the company, which seeks to recover damages in excess of a minimum of $5 million.

"If I had read the reviews online beforehand, I would have seen that this was a pattern for them and that I shouldn't have signed up," said Carney.

So what did PURA do?

They actually closed Carney's complaint, saying that Viridian provided proof of the letters allegedly sent to Carney.

You can read PURA's full response to Kelly here

PURA said the state considers correspondence as "delivered" unless the postal service says otherwise, but Kelly and dozens of other customers have all said they never received letters.

A PURA representative told Carney:

Suppliers are not regulated and therefore are free to charge pretty much anything they want. There are certain rules they must follow but certainly not anything like a regulated utility... I'm sorry... but our hands are tied...

The Better Business Bureau told Fox CT that it recommends consumers to always read the fine print before signing any contracts and to know how long the fixed rate will last and the specific  rules for canceling.

After this report aired on Wednesday February 25th 2015, FoxCT learned that West Hartford attorney, Robert Izard, has also filed a class action lawsuit against Viridian Energy - this one in Connecticut. It also seeks $5 Million.

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