IGS Energy's attempt to scam Cleveland's Dominion customer base

I received two mailings the week of 2/9/2009, both in the same attractive envelope from IGS Energy, postmarked from Lancaster, Ohio.  The offer was this: lock in low fixed rate of $8.99 per MCF for your natural gas supplier, Dominion East Ohio.  The current variable rate is $11.70, and like gasoline – it goes up and down depending on the market.  I didn’t think it was a scam since IGS actually worked with Dominion (as a direct supplier), and no service was ever stopped or changed.  The customer is simply requested to submit their Dominion account number, IGS would then contact Dominion and the price of natural gas would drop from Dominions $11.7 per MCF to $8.99, quite potentially saving the customer around $15-20 a month.

I called to ask a few questions, and immediately was greeted by a chipper young lady asking for my account number.  She explained that if I enrolled today, within 2 billing cycles my gas bill would be $8.99 per MCF through 2010.

I ask:

“Well what happens if Dominion’s rate dips below $8.99, would I still have to pay the fixed rate of $8.99, or would Dominion’s rate kick back to the lower price?”

Her Response:

“At that point, you would have to call IGS back and cancel for a low fee of $100.”

Here’s where it gets tricky.  Remember how there were two mailings?  The first mailing made this offer through December 2009.  The second mailing, in the same envelope and printed on the same paper made the same fixed rate offer through December 2010.  That catch: only the first mailing contained this paragraph:

“There is absolutely no risk with IGS Energy since there are no sign up fees, no cancellation fees, and no long term commitment.”

I immediately ask the IGS person on the phone as to why I would have pay $100 to cancel a service that clearly states this should never happen.  After reading the above quote to her, she acted as if this was news to her and no mailing should make that claim.  She paused before rewinding and saying:

“Oh you must have the offer through 2009.  I signed you up for the 2010 offer, let me just make that change real quick…”

How many people out there received these exact two mailings days apart and signed up for an offer that was clearly stated as having no commitment?  A locked in low rate of $8.99 per month through 2010?  Surely the natural gas market will dip below that rate within the next 2 years, and each customer would then have to pay $100 to break out from IGS / Dominion.

Who’s to say that the rate for natural gas will decrease?  Plain Dealer reporter,  John Funk.  In his January 28th, 2009 article he writes:

“Consumers who buy directly from Dominion East Ohio gas company will see gas prices tumble by 20 percent in mid February to $6.81 per 1,000 cubic feet.”

“The steep price decline comes at a cost of millions of jobs. Gas consumption has fallen by about 10 percent as factories have reduced the number of shifts per day, steel mills shut down blast furnaces and retailers closed their doors for good.”

WHAT A SCAM!  Here we have an article dated January 2009 stating that Dominion’s rate will drop tremendously in the coming weeks, and we have IGS trying to capitalize on this and blindly rip off thousands of Northeast Ohio gas customers!  They are trying to lock in their rate and overcharge or use multiple mailings to trick people into paying a $100 cancellation fee.

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13 comments

  1. andy

    you ought to see the scam being perpetrated on citizens in cities all over Ohio,who sign up for an aggregation program through this gas supplier.
    your rate is actually higher than the rate provided to you through your utility.
    Contact IGS Energy and ask them the rates cities in Ohio signed up for on their aggregation plan.
    i bet their rate is higher.
    you have no idea how big this scam is.
    this is a deregulated industry,which is how these crooks survive.

  2. Ernest Mitchell

    They got me to shawn I am in Michigan I to sign up for a locked in rate of 1.06 in MI. and the price fell to .74 a ccf and cost me way more for gas than my neighbors,its a scam let me know and we can put a stop to this start a whitehouse.gov to let them know and work down. Ernest Mitchell

  3. andy

    i used to work for the boiler room hired by IGS Energy here in Dublin,Ohio to solicit natural gas customers to choose IGS Energy as their natural gas supplier.
    this a scam of the highest magnitude.you do not save a dime on your gas bill.
    if you have IGS Energy as a supplier on your gas service,and want them removed,simply change the name on the gas bill,or inform IGS Energy that you specifically did not give permission for them to be your supplier.
    this kicks them off of your service.

  4. Shawn

    “They got me to shawn I am in Michigan I to sign up for a locked in rate of 1.06 in MI. and the price fell to .74 a ccf and cost me way more for gas than my neighbors,its a scam let me know and we can put a stop to this start a whitehouse.gov to let them know and work down. Ernest Mitchell”

    Welcome to the market. Thats why companies do fixed rates. Thats why they also pitch them hard during times when people are mad at high prices and when prices are at the highest. Why would expect to lock in at natural gases highest price?

    Why don’t you think they aren’t pitching it right now? Because now is really good. Prices are going up again with Obama and Congress in.

  5. "Johnny"

    I will make this disclaimer now; I did work for IGS for a long time. I will first address Shawn. You seem like an intelligent person. First, “Here’s where it gets tricky. Remember how there were two mailings? The first mailing made this offer through December 2009. The second mailing, in the same envelope and printed on the same paper made the same fixed rate offer through December 2010.” Look at your pictures again; the second mailer is to June 2010. And the reason there was a cancellation on the longer contract is because it cost IGS more to secure gas for a longer period. IGS has to secure gas for you for the duration of the contract when you sign up. That is how they can offer fixed rates; they buy all your gas at that time. So let’s say your contract only goes till Dec2010, half the heating season, and IGS has to secure $500 in gas for you. Now let say you sign up for June2010, IGS now has to secure let’s say $1500 because all you’re heating and more are included in this contract. Ok now let’s say you cancel on both in November, well that $500 on the first contract you used $460 of it, IGS lost $40. Now on the contract were IGS secured $1500, you still on used $460 worth of the gas IGS bought for you. Now instead of losing only $40 IGS lost $1040. The $100 is to deter a customer from cancelling, but also to regain some of those loses. I hope that explains why there is 2 different contracts, plus some customers what no cancellation fee and some want a contract that covers the entire winter.
    Second point: This is a personal decision for you to make. Just like fix/variable rates on mortgages. It all depends on what type of person you are and how you view financials. If you choose a fixed rate it is not IGS vault if rates go down and they do not make any more money since they had to secure your gas already as I described above. Would you write a blog about chase mortgage if you chose a fixed rate and then interest rates dropped on a variable?? I hope not, because you made the decision to go on that variable rate.
    Third, IGS has almost always what’s called a guaranteed savings rate. This is a variable rate that is guaranteed to be less than your utilities rate by a certain amount. You always save on this rate no matter what, it is lower. Just having this rate available makes this not a scam.

    To answer Andy’s first post, a lot of aggregations are higher this year because cities negotiated the price when gas was higher. That is not IGS’s fault. Plus on the aggregations you can leave anytime. Most of the aggregations are going to this guaranteed savings price anyway. Andy’s first post holds no water.

    To Ernest: You signed up on $1.06 and prices dropped. The year before IGS offered $.75 and then your utility charged $1.13. A year before you would have saved compared to now. It is an up and down cycle. That’s why you can actually save a lot of money if you stay proactive on your account. Plus IGS has never had a cancellation fee with your utilities contracts. You could have left at any time or got a lower rate.

    Andy’s second post: Boiler room?? You’re giving yourself way too much credit. It is an outbound call center, not the NYSE. It doesn’t take someone with much intelligence to work there as pointed out by your lack of knowledge of free markets and the natural gas industry in general. Andy what do you say about the guaranteed savings most of IGS customer base is on? How is that a scam?

    You seem like a nice guy Shawn, trying to voice your opinion to try and help people. I’m not saying your right or wrong liking the fixed or variable rate, but leave the debate to that. Don’t throw a company under the best because you understand about %10 of the industry and how it works. That is just irresponsible.

    P.S. You contradicted yourself with the Obama jab and then hating free markets. Brush up on your economics.

    • Shawn

      Welp, I’m not going to debate you on the difference between fixed rate or variable; it’s not that low level – my point was to denounce a “scammy” offer that was packaged up to be something it wasn’t. The offer advertised a lower rate without fully explaining this rate could potentially be more than a current rate if the gas co. lowered theres. There WAS in fact an early cancellation fee. The sole intention of the mailings was to hook people in, people who may not know the ins and outs as you have described above. It’s no more irresponsible for me to write a wordy blog explaining my distaste of a crap offer than it is for IGS to send the offer. Have you called the IGS support center? Their techniques are designed to get people to sign up as fast as possible and lock into the fixed rate, and then make it even harder to cancel. I went through it. Somethings fishy there, and sure, your explanation clears it up – but IGS is on the bottom of my list of companies to write “responsible blogs” about. Thanks for the words. PS – the Obama comment was a typo (among others), I meant to argue that gas co. rates would fall under Obama.

  6. "Johnny"

    I like your style Shawn, atleast your not an asshole and will take the time to listen to someone without making some irrational statement. Here is the way I see it, the debate is solely on a fixed rate vs a variable. Fixed rate vs variable rate is basic knowledge. In any facet of life a variable rate can go below a fixed rate and just as easily go above the fixed rate. I don’t think a company has the obligation to teach a customer that, just like a company doesn’t have to teach someone 2+2=4.

    I still do not understand your need to call it a scammy offer. A scam is to be untruthful for gains. Now where in the mailer is it untruthful. IGS is offering a fixed rate. No where does it say is is going to be lower than the variable.The mailer is pretty cut and dry with what it is offering, in my opinion.

    There was a cancellation fee on the longer contract, not the shorter. I explained why they do that in my previous post.

    Mailers are advertisement. They are in fact meant to gain customer base. But isn’t that what marketing is? What is the difference,in a marketing aspect, from sending a mailer offering our rates or hiring Billy Mays to sell my product?

    I just think you need to understand the gas industry more before you write a wordy blog. At the time you received the mailer, lets say you signed up for $8.99, and for the next year gas prices from your utility were $10, would that mailer be scammy and a bad offer when it saved you $1 per mcf. I don’t think so, I think you would have been very satisfied at your decision to sign up. Here is the catch we can see now that gas prices have dropped compared to that offer, but unless you had a crystal ball at the time the mailer was sent out, you didn’t know which way gas was going, nobody did. And one thing you need to remember is that experts on anything can and are often time wrong when it comes to open market trends.

    Yes i have called there support center. There is two things you have to remember, there is a sales line and a customer service line. The sales line, most of the time will revert to that call center that is hired by IGS. The customer line is in house. The customer service line is more knowledgeable about the gas industry and IGS products. The sales line is just there to sell. I don’t necessarily agree with the sales line. I actually worked for IGS making sure people knew what they were talking about when they spoke to a customer. The sales line was a little harder to control because there is such a high turn over rate with that other company. And I do apologize if you had a bad experience with the sales line.

    And I missed this on your last post, IGS is pitching all the offers it can right now. Having low rates for customers is the same as having high rates when gas is high when it comes to profits. They make the exact same, but like any company IGS is pushy hard right now because they want to benefit their customers with lower rates.

    There is nothing fishy going on. It’s just a business your not familiar with.

    So who is your supplier now?

  7. Shawn

    I switched back to Dom shortly after I read about IGS.

    You’re right, the IGS mailings are no different than using Billy Mays to market a product. I’ll leave it at that.

  8. Rick Steadman

    A good debate. I’ve gotten these mailers off and on and thought about changing but never did. The key to making a decision is knowledge and between “Johnny” and you, I now have that.

  9. Mr Sokitumi

    Ok heres what i know , buisness is for profit PERIOD. Knowing that just stay with your own gas co. and watch this winter gas is supposed to go down i have great skill at the markets just as when the U.S. gov. printed all that bailout money I knew that gold would sky rocket up not cause gold is worth more. But because you dollar will buy less gold for the buck. Now the 2 headed snake is will your dollar still buy the same amount of gas how will it equal out. Well seeing IGS is a gas company in America and american gas isnt really in the global market the same as gold you might not see the same thing happen with your dollar power to buy gas. I say watch this winter and see where the cost goes and compare with that offered fix rate Im willing to bet IGS`s chrystal ball knows more about where its goin to go than the average person and that is what this company is betting on(4 PROFIT). There are many clues on the news and in the markets that say with the millions of forclosures and buisness closings that product in demand is goin to bring prices down but you have to equate into that figure where is the dollar power goin to be? Ill sit back and watch and stay out of IGS also 2 winters ago i switched without really looking at the picture and lost to IGS and paid more for gas than my neighbors that didnt switch. Also take a look at gas prices goin from summer to winter over the past few years i will when im done writing this but my gut says Ill find that prices drop a little with winter demand but will see..Have A Nice Day =)

  10. Loyce Rost

    Vitality deregulation ought to be pressured onto every state. It’s a no brainer, we offer the supply aspect of your electrical bill. This lowers your cost while your present utility company nonetheless supplies the identical service. You still get one invoice it just saves you money.

  11. David Dinger

    The greed for more profit is behind of all these questionable practices and other economic problems the world is mired in. The only answer is religious socialism. Nationalize all utilities including the telecommunication industry and put them under the authority of the Dali Lama. Those monks wouldn’t waste everyones money on worldly excesses. No Armani suits or BMWs for those boys. Think (while chanting) about it!

  12. Pingback: IGS Energy Scam or Legit? | KeyFrame5

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