Attorney General Kwame Raoul announced a $12 million settlement with Direct Energy Services LLC (Direct Energy) that resolves allegations the alternative retail electric supplier (ARES) engaged in fraudulent, unfair and deceptive business practices to mislead Illinois consumers into paying millions of dollars more for electricity than consumers who stayed with their default public utility.
A consent judgment entered by the Cook County Circuit Court will provide restitution to eligible Illinois customers who received residential electricity supply services from Direct Energy between 2013 and April 2025. The restitution amounts will largely be based upon eligible customers’ electricity usage during the period in which they purchased electricity from Direct Energy.
“Companies like Direct Energy must be held accountable for taking advantage of consumers with misrepresentations and false promises of lower prices,” Raoul said. “My office is committed to protecting Illinois residents from such deceptive practices and preventing people from being misled into overpaying for the energy they need.”
The Attorney General’s office filed a complaint alleging that Direct Energy violated the Illinois Consumer Fraud and Deceptive Business Practices Act by deceptively enrolling consumers in Direct Energy services, at times charging consumers electricity rates over 230% more than they would have paid under their default public utility rate.
In addition to restitution, Attorney General Raoul’s office obtained critical injunctive relief to prevent Direct Energy from using such deceptive practices going forward. For instance, under the consent judgment, Direct Energy is required to stop marketing and enrolling customers in Illinois for 12 months. The consent judgement also includes a permanent injunction barring the ARES company from deceptive practices including:
- Enrolling consumers in Direct Energy services without their knowledge or consent.
- Failing to obtain consumers’ consent to telemarketing solicitations, as required by the Telephone Solicitations Act.
- Misrepresenting that consumers would save money.
- Misrepresenting an affiliation with the public utility or government.
- Unfairly and deceptively obtaining consumers’ account information.
- Misrepresenting a “price protection” through a state or utility “program.”
- Failing to disclose new rates and new terms.
Raoul’s office has also filed lawsuits against ARES and third-party vendors that allegedly deceived Illinois customers into switching from their public utility companies to more expensive contracts with ARES. In May 2024, Raoul sued Southeast Energy Consultants LLC (SEC), a third-party vendor working on behalf of several ARES, alleging customers were deceived into switching to more expensive ARES contracts. In 2023, Raoul sued Residents Energy LLC over allegations that the company’s telemarketers and in-person sales agents used deceptive and unfair tactics to switch customers from their public utility companies to more expensive contracts with Residents. The Attorney General’s office previously settled lawsuits or investigations into Liberty Power Holdings LLC, Major Energy Electric Services LLC, Eligo Energy IL LLC, Realgy LLC, Atlantic Energy MD LLC, Palmco Power IL LLC, IDT Energy INC., Sperian Energy Corp., and Mega Energy of Illinois. The Attorney General’s office is also continuing to pursue investigations into other ARES.
Attorney General Raoul also initiated the Home Energy Affordability and Transparency (HEAT) Act, which strengthens oversight of alternative energy suppliers and protects consumers from bad supplier contracts. The HEAT Act went into effect in January 2020 and gave the Attorney General’s office stronger tools to shut down suppliers that engage in fraudulent and misleading conduct and to return money to consumers who have been harmed.
Consumer Protection Division Chief Susan Ellis, Assistant Chief Deputy Attorney General Thomas J. Verticchio, and Public Interest Counsel Darren Kinkead are handling the case for Raoul’s office. Illinois-based law firms Edelson PC; Hughes Socol Piers Resnick & Dym, Ltd.; and Miner, Barnhill & Galland, P.C. are also assisting with the case.
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