State’s AG warns suppliers about cold weather cons

MARQUETTE – Michigan Attorney General Bill Schuette warned suppliers Wednesday against using tactics that take advantage of consumers who are continuing to deal with effects of bitterly cold temperatures and a regional propane shortage.

“With the current cold snap and volatile propane prices due to increased demand and lower supply, Michigan consumers are already struggling with rising costs, making it hard on family budgets,” Schuette said in a news release. “We will not tolerate any unscrupulous behavior that violates Michigan law. Suppliers be warned: We are watching and will not hesitate to take action if the law is broken.”

State officials said recently Schuette’s office had received about 300 price gouging complaints related to the regional propane shortage, which has deeply affected the Upper Peninsula.

Schuette’s office said due in part to the recent volatility in propane prices, the Department of Attorney General has received hundreds of complaints about propane suppliers that are being reviewed as an investigation into alleged illegal business practices continue.

Under the Michigan Consumer Protection Act, a retailer may not charge a price that is “grossly in excess of the price at which similar property or services are sold.”

The law also prohibits other conduct that tends to mislead or deceive the consumer in relation to material aspects of the transaction in question. Anti-trust laws prohibit agreements among suppliers to arbitrarily fix prices. The attorney general’s office fact finding continues as the propane-related complaints are reviewed and investigated to determine what further action is warranted, the news release said.

Schuette has secured convictions for gasoline price fixing by five Michigan station owners. The attorney general’s department has also entered into “compliance agreements” with suppliers requiring them to submit to monitoring after they spiked prices well above the statewide norm on a particular day or after a weather event, the news release stated.

Schuette warned consumers who have guaranteed price contracts with propane suppliers that they may be subject to higher market prices once they’ve used the guaranteed amount covered by their contract. Currently the reported statewide average for propane is approximately $3.20 per gallon, much higher than some consumers’ locked-in price.

“The prolonged cold snap has significantly increased propane usage, and for consumers that have used their allotment of propane at a set price for the season, the higher market prices may come as a shock once their contracts are renewed,” the news release stated. “Consumers are urged to review their agreements and confirm their contractual rights in this regard.”

Schuette’s office said that if consumers become aware of direct evidence of a conspiracy between companies, or have verifiable evidence of a retailer engaged in behavior that violates the Consumer Protection Act, they are encouraged to contact the Attorney General’s Consumer Protection Division at 1-877-765-8388 or file an online complaint at www.michigan.gov/ag.