CHICAGO – Illinois Attorney General Kwame Raoul filed a lawsuit in Cook County Circuit Court against Residents Energy, LLC, accusing the company of using misleading sales tactics to persuade Illinois users to sign up for service, resulting in higher costs for consumers.
Raoul accuses Residents of violations of the Telephone Solicitations Act and the Consumer Fraud and Deceptive Business Practices Act, misrepresentations about historical rates, failure to notify customers of rate increases, and the enrollment of consumers without consent.
In his lawsuit, Raoul accuses New York-based Residents of engaging in deceptive and fraudulent practices in the marketing and sale of electricity services in Illinois. Despite the state's deregulated energy market, Residents Energy allegedly used misleading tactics to persuade customers to switch to their services, resulting in higher costs for consumers. Specific sales tactics included false promises of cost savings, deceptive marketing strategies, and unauthorized customer enrollment.
According to court documents, after an initial competitive rate, Residents Energy consistently increased rates for variable-rate customers, allegedly well above the default utility rate. Compiled data showed that some customers experienced rate increases of nearly triple the initial rate within 10 months.
The lawsuit also accused Residents Energy of using third-party sales representatives who allegedly utilized deceptive practices during the enrollment process, which allegedly violated Illinois law by conducting both enrollment and verification processes. Additionally, Residents Energy allegedly misled customers by misrepresenting affiliation with public utilities and the existence of a non-existent "Energy Choice Program" in Illinois, leading customers to believe in non-existent rebates and savings.
The Attorney General is seeking injunctions to prevent further violations by the defendant and to protect Illinois consumers and is requesting that the court revoke the defendant's certification to operate as an alternative retail electric supplier in Illinois. Additionally, the lawsuit seeks restitution, rescission of contracts, refund of payments, and civil penalties of up to $50,000 per violation, with heightened penalties for actions conducted with the intent to defraud or target vulnerable consumers.