November 7, 2014 11:23 am

Just Energy accused of ‘slamming’ to sign up customers

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WATCH ABOVE: “Slamming” is a controversial practice that occurs when a consumer or company discovers their gas or electricity contract has been signed over to another energy company without that person or company knowing or authorizing it to happen.

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One day in October of 2007, Adam Gordon, an accountant at Streamline Foods Ltd. received a visit from Glen Lancaster, a salesman for Just Energy Group Inc. Lancaster had come to meet Gordon at the Belleville, Ont.-based food company to try and convince Streamline to sign over its energy contracts to Just Energy.

Specifically, Lancaster wanted Steamline to sign an agreement that would set Streamline’s electricity prices at a fixed rate for five years.

According to a court document, Gordon listened politely to Lancaster’s pitch before telling him he wasn’t interested in the idea and didn’t have the authority to sign over Streamline’s electricity contract. He said he would have to discuss Lancaster’s proposal with his superiors.

As Lancaster got up to leave he asked Gordon if the accountant would sign a document “to ensure that the fixed rate for electricity they discussed would be protected” should the company agree to become a Just Energy client, according to allegations in a lawsuit Streamline later launched. Gordon says he signed, thinking it was harmless. He says he later spoke to Lancaster and told him Streamline was not interested in signing one of Just Energy’s plans.

READ MORE: Canadian energy company stalked by controversy over its sales methods

A few months later, Streamline received an invoice from Just Energy seeking money for Streamline’s electricity charges. Adam Gordon was stunned, he says he nor anyone else at Streamline had agreed to sign up to become a Just Energy customer. (Just Energy later claimed the contract was legitimate.)

Was Streamline a victim of a controversial practice called “slamming”?

David Kolata, executive director of the Citizens Utility Board, a consumer watchdog in Chicago, told 16×9 that slamming occurs when a consumer or company discovers their gas or electricity contract has been signed over to another energy company without that person or company knowing or authorizing it to happen.

“We’ve received through the years a significant number of complaints around slamming about Just Energy,” says Kolata.

“We’ve received complaints along the lines of someone going door-to-door and saying here’s a petition to lower your natural gas bill. Of course, a lot of consumers want to do that. They sign it. And lo and behold, a month or two down the line, that petition would have actually switched their service to Just Energy.”

In fact, 16×9 has uncovered four lawsuits against Just Energy over allegations it has engaged in slamming – one in the U.S. and three in Canada. And three of those lawsuits involved Just Energy salesman Glen Lancaster, a controversial character in his own right.

That’s because, in 2006, Lancaster received a three-year prison sentence for his involvement in a series of fraudulent companies. He’d worked with Guy Paul Beaupre, a notorious fraud artist whose stock-in-trade was telemarketing and other similar scams orchestrated during the 1990s (Beaupre went to prison in 2004 and was ordered to pay $2.7 million in restitution to his victims for his crimes).

Lancaster pled guilty to three fraud charges, with losses for victims in the order of $6 million. During his sentencing, the judge observed: “It’s obvious to me that you are a very talented man. You could sell refrigerators to Eskimos. Your problem is not knowing when the Eskimos don’t want the refrigerators.”

As it turns out, Lancaster began working for Just Energy in 2005 after he had already been publicly connected to Beaupre’s criminal enterprise. In fact, Lancaster was working for Just Energy when he went to prison, and recommenced working for them once he got out. What’s more, he continues to work for Just Energy to this very day.

Along with a 2008 lawsuit launched by Streamline against Just Energy that cites Lancaster’s involvement in that alleged slamming case (which was settled), he was named in a 2011 lawsuit launched by the Canadian Medical Association (the lobby group for Canada’s medical doctors) over a similar allegation against Just Energy (which was also settled), and a 2013 lawsuit initiated by D’Angelo Brands, a soft drink company owned by flamboyant Toronto businessman Frank D’Angelo. In these cases, Just Energy denies the allegations against them.

When Just Energy’s co-CEO Deborah Merril was asked by 16×9 about slamming allegations against her company, she replied: “Every single customer is verified on the phone. So if for some reason they say ‘No, that’s not what I wanted’, or say ‘No, I didn’t sign up’, or ‘No, that wasn’t what I intended to do’, then we do not enroll them.”

In regards to why they continue to employ Glen Lancaster, Merril said: “We make sure that every single person is doing what they should be doing so I think that if somebody’s made a mistake that’s not necessarily an indication of their future value.”

16×9’s investigation into “Just Energy” airs this Saturday at 7pm.

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