At Issue & In Focus

Assisting Massachusetts Consumers

Some residents calling into the Attorney General’s Consumer Hotline Monday were initially surprised to learn that the familiar voice on the other end of the phone was their Attorney General, Martha Coakley.  AG Coakley spent an hour on the hotline for consumers Monday morning in order to hear personally from Massachusetts residents recovering from tropical storm Irene. She also spoke to consumers who felt that they were the victim of fraud, deception or unfair business practices and were interested in filing a complaint with the Attorney General’s Office.

The Consumer Hotline receives over 5,000 calls and over 3,000 emails and letters each month.  It can be reached at 617-727-8400 and is staffed weekdays with trained mediation specialists who can:

• answer questions and provide information; and/or
• offer referrals to appropriate organizations or government agencies for help; and/or
• provide information on the Attorney General’s consumer complaint and mediation services.

 

In the Attorney General’s Office (AGO), every consumer matters. If you could benefit from consumer information or mediation services, contact us. Last year alone, our mediators and Local Consumer Programs funded by our office were able to recover $4 million through informal mediation directly back to Massachusetts consumers.

To learn more, visit http://www.mass.gov/ago/complaints.

Gas Prices on the Rise

As most consumers have noticed, gas prices are on the rise. Many factors contribute to the increases we see at the pump, including major world events. We know that high gas prices continue to impact families and businesses, but that rising gas prices alone, however, are not necessarily an indication that gas station retailers are engaging in unlawful conduct.

The Attorney General’s Office is committed to providing consumers helpful information, and to fighting higher gasoline prices if those price increases violate the law.

Here’s some basic, helpful information to help you deal with rising prices:

Unlawful practices: It is unlawful for companies to collude to raise prices or to take advantage of market emergencies, such as hurricanes or other severe storms, to charge unconscionably high prices. If you have concerns or evidence of collusion or price gouging, please contact us at 617-727-8400, or file a complaint online.

Credit v. Cash at the Pump: Consumers should be aware that stations can charge different prices for using cash to pay versus using a credit/debit card. Massachusetts law, MGL c. 140D § 28A, allows gas stations to discount their price for consumers paying with cash.  The gas station should be advertising the higher price.  If a discount is offered for cash sales, the word “cash” must be included in the applicable portion of the sign.  You can read more about guidelines for signage of the cash sale option. If you have concerns or evidence of discrepancies in prices, please contact us at 617-727-8400, or file a complaint online.

Educate Yourself: You can research gas prices before filling up your tank. Various websites and smartphone apps are available to help you identify rates at service stations near you. Some of the information is provided by other users who are on the lookout for their fellow commuters. While we’re not responsible for the content of any of the links below, you may find them useful:

 

Websites:

Massachusetts Gas Prices
Fueleconomy.gov
AAA Fuel Gauge Report
MapQuest Gas Prices

 

Smartphone Apps:

GasBuddy Mobile Apps (various platforms)
AAA TripTik (iPhone) 
FuelFinder (iPhone) 
Gasbot (Android and Blackberry)

 

FAQs about Gas Prices

As prices at the gas pump continue to rise, the Attorney General’s Office is committed to providing consumers helpful information.  AG Coakley has issued an advisory to consumers on gas prices, and offers the below answers to frequently asked questions. 

The Office of the Attorney General intends to monitor compliance with the regulations governing the retail advertising and sale of gasoline and will enforce these regulations against any noncompliant retailers.  AG Coakley asks drivers with allegations of unlawful behavior regarding gas prices to contact her office’s consumer hotline at (617) 727-8400. 

 

How can I shop around for the lowest gas price in my area, without driving around and wasting gas?

Various websites and smartphone applications are available to help you identify rates at service stations near you. See above for a sample of some of the options available.

 

Is it legal for oil companies and gas stations to keep increasing their prices? 

The United States has long embraced a free market economy.  Free market principles, such as supply and demand, establish the price for most goods and services, including gasoline.  The government—state or federal—does not set the price for gasoline.  A large number of factors determine how gas producers, refiners, wholesalers and retailers set their prices.  Those prices are then subject, in a free market economy, to competition from other businesses.

Rising gas prices alone are not evidence of illegal or improper conduct by gas retailers. It is, however, unlawful for companies to collude to raise prices, such as an explicit agreement among competitors to raise or fix prices.  In addition, in cases where a market emergency exists, such as in the event of a natural disaster or world conflict, it is illegal for a company to take advantage of that emergency by charging unconscionably high prices—which constitutes “price gouging.” 

 

What factors influence gasoline prices?

Factors range from the costs of exploring for oil and extracting it from the earth, to the costs of refining oil into gasoline, shipping oil or gasoline from around the world to major distribution hubs, transporting gasoline from refineries to local retailers, to making it available at your local gas station or convenience store.  Supply and demand factors influence prices at every level of production and distribution, including events across the globe that may affect supply. In 2007, Attorney General Martha Coakley and several other Northeast States commissioned a report on the structure of petroleum markets in the Northeast, including factors that influence how gasoline prices are set.  For detailed information you can review the Report on Petroleum Products Markets in the Northeast.  This Report was prepared in 2007 for Attorney General Coakley as well as the Attorneys General of Maine, New Hampshire, New York and Vermont.

 

Is there a law which requires gas stations to accurately display their prices for gas?

Yes.  Pursuant to G.L. c. 94, section 295E, no retail dealer may sell motor fuel at any price other than the price posted at the pump at the time of the sale.

 

A local station charges a lower price for cash only purchases.  Is this legal?

Massachusetts law (G.L. c. 140D § 28A) allows gas stations to discount their prices for consumers paying with cash.  However, the gas station should be advertising the higher credit price clearly and conspicuously in its signage.  If a discount is offered for cash sales, the words “cash” should be included in the applicable portion of the signs.  When “cash” sales and other types of sales are made from the same dispenser, both prices must be posted and clearly labeled with the type of sale the price refers. i.e. “cash”, “credit”, “credit/debit”.  You can read more about guidelines for signage of the cash sale option at http://www.mass.gov/Eoca/docs/dos/202CMR2%2000final_clean.pdf. 

 

What types of conduct would violate the antitrust laws?

Price-fixing and other forms of collusion violate the antitrust laws.  Price-fixing includes an explicit agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services, including gasoline, are sold to the detriment of either the competitive marketplace or consumers.  Consumers can help by alerting the Massachusetts Attorney General’s Office if they know of any efforts by competing firms to fix or manipulate prices.  Business mergers and monopolistic practices that would result in reduced competition and harm to consumers may also violate the antitrust laws.  The Attorney General’s Office closely monitors proposed mergers to maintain competition.

 

If a “market emergency” existed due to a natural disaster or world conflict, what conduct would constitute “price gouging?”

A price may be deemed unconscionably high, and “price gouging,” if  the amount charged represented a gross disparity between the price of the petroleum product and 1) the price at which the same product was sold or offered for sale by the petroleum-related business in the usual course of business immediately prior to the onset of the market emergency, or 2) the price at which the same or similar petroleum product is readily obtainable by other buyers in the trade area; provided that the disparity is not substantially attributable to increased prices charged by the petroleum-related business suppliers or increased costs due to an abnormal market disruption.

New Smoke Detector Regulations In Effect

On April 5, 2010, revised smoke detector rules from the Massachusetts Board of Fire Prevention took effect for homes being sold in the state.  The new regulations require that homes be equipped with photoelectric smoke detectors, which many fire safety experts believe are most effective in detecting smoldering fires and are not as prone to false alarms as the older alternate, ionization detectors.

While ionization detectors usually detect fire more quickly and are better at detecting fast-moving fires, experts suggest that they are more prone to false alarms caused by steam or cooking fumes.  Photoelectric detectors offer a solution to false alarms because they are less sensitive to things like shower steam.  Both kinds of detectors have advantages, which is why the new regulations require that homes be equipped with both.  Under these regulations, photoelectric detectors are required within 20 feet of kitchens or bathrooms containing a tub or shower; ionization detectors are not permitted in these areas.  However, areas beyond 20 feet require both photoelectric and ionization detectors, either in a dual detector or two separate detectors.  While the regulations only apply to homes being sold, it is a good idea for all homeowners to equip their homes with the latest technology in smoke detectors.  

For more detailed information, see the guide from the Department of Fire Services and a bulletin from the Boston Fire Department.

Elders and Utility Shut-Off

Do you regularly check-in on the elders in your family or neighborhood? Are you worried they are having trouble affording to stay warm this winter?

As the temperatures drop into the teens and single digits, it is a good time to remember that senior citizens are particularly vulnerable to hypothermia and, because of that, households where everyone in the home is age 65 or older are protected from utility shut-offs (gas, electricity and landline telephone) at this time of year, regardless of ability to pay.

In order to receive this shut-off protection, elders must contact their local utility who will send them the appropriate form(s) to fill out.

For more information about utility shut-off protection, and to find resources for heating assistance, go to the Massachusetts Department of Public Utilities website or call them at (617) 737-2836 or 1-877-886-5066.

Don’t Be Left Out in the Cold

It is the end of October and already the first flurries of the season have come and gone. With freezing temperatures lurking, don’t be left out in the cold.
 
Between November 15 and March 15, the Massachusetts Winter Moratorium prevents Massachusetts’ utility companies from shutting off your heating fuel or the service that you need to run your heating system (i.e. a gas furnace with electrical switch.) because of an inability to pay. However, you will still be responsible for payment during this time and charges will continue be applied to your account. The Winter Moratorium applies only to the period of November 15th through March; it does not apply if your service has been shut off prior to November 15th for non-payment.
 
If you are having trouble paying your utility bills there may be some help out there for you. The AGO’s Public Inquiry & Assistance Center may be able to help mediate in the case of a shut off or to help with a payment plan. You can contact the consumer hotline at (617) 727-8400 Monday through Friday from 10 a.m. to 4 p.m. If you can prove a financial hardship, have a child less than 12 months of age, someone in the home has a documented serious illness, or everyone in the home is over the age of 65, the Massachusetts Department of Public Utilities may also be able to take your complaint and provide some assistance. You can contact your local Community Action Program for assistance. 

New FTC Rules on Robocalls: September 1

Back in April, At Issue & In Focus featured a blog post about new FTC regulations for “robocalls,” or recorded telemarketing messages placed by automatic dialing announcing devices. As we shared with you:

The new rules require that telemarketers may only send prerecorded sales pitches to people who have provided "prior express written agreement to receive such calls."  There are some exceptions to the new rules.  Health care-related calls (including reminders to pick up your prescription or keep your dentist appointment) are still allowed, as are fundraising calls from nonprofit charitable organizations. The fundraising calls must include an automated opt-out, however.

The new rules take effect on Tuesday, September 1, 2009.  To learn more about the specifics of these rules, visit the Automated/Prerecorded Telemarketing Calls section of the AGO website, or visit the FTC website.

Here Comes the Sun

While it may be challenging to grasp a future that is reliant on converting rays of sunlight into cost-effective electricity given the dank weather of late in New England, solar energy will be a vital part of a cleaner and more energy efficient future. In addition to developing other renewable energy sources from wind, rain, and the tides, capturing sunlight with the use of reflective technology is one of the ways we can reduce greenhouse gases and create so-called green jobs that will stimulate the economy.

Massachusetts has already enacted legislation to ensure that solar energy is part of the state’s energy future. The Commonwealth’s Green Communities Act, enacted in 2008, allows the four investor-owned utilities in Massachusetts until the end of 2012 to develop up to 50 megawatts (MW) of solar photovoltaic (PV) generating capacity. In an effort to maximize the benefits of renewable power for ratepayers across the state and help meet Governor Deval Patrick’s goal of 250 MW of solar generation installed in the Commonwealth by 2017, Attorney General Coakley and Governor Patrick have announced a commitment to jointly develop large scale solar PV power installations through a new statewide entity that will collaborate with the four investor-owned utilities.  To learn more, view the press release announcing this decision.   

Last week’s announcement by Governor Patrick and Attorney General Coakley was steered in part by the belief that the development of solar generation through a statewide pool will make solar energy more cost-effective and will spread the costs and benefits across the broadest base of customers. Support behind this approach is geared toward creating incentives for utilities to move forward with the development of large scale solar energy projects in the Commonwealth.

The Commonwealth is not alone in its quest to create a more diversified energy supply. The U.S. Department of Energy on July 15, 2009 committed $52.5 million for Concentrating Solar Power (CSP) research.  CSP technologies capture the sun’s heat and then utilize that heating power to drive turbines, which then produces electrical power. This type of technology also provides the answer to how do you derive energy from the sun on cloudy days, because the technology provides for low-cost storage of solar energy for use on days when the sun is not shining.

Settlement with DISH Network, Unfair & Deceptive Sales Practices

Last week, Attorney General Martha Coakley and Attorneys General of 45 other states entered into a $5 million settlement agreement with satellite TV provider DISH network to resolve allegations it engaged in unfair and deceptive sales practices.  In some instances DISH Network failed to make adequate disclosures to customers, and in others charged credit cards and bank accounts without proper authorization, among other allegations.  Massachusetts will receive $125,000 under the terms of the settlement, which will be used to fund Local Consumer Programs.

Are you a DISH Network customer?  The company will offer restitution to eligible consumers who filed complaints with the Attorney General’s Office or with DISH Network between January 1, 2004 and July 16, 2009.  Consumers who file complaints by December 15, 2009, directly with DISH Network, or with the Attorney General’s Office or the Better Business Bureau, may be eligible for restitution if they suffered a loss due to conduct which occurred within the past two years.  For details, view a press release on the AGO website or contact the AGO’s Public Inquiry & Assistance Center.

DPU Hearings: It's Not Too Late

As we blogged back in June, the Department of Public Utilities (DPU) hosted a series of public hearings over the last two weeks on National Grid’s request to provide the company with an $111,300,000 increase in distribution rates beginning on January 1, 2010.  In case you missed the hearings, there is still time and a way to voice your opinion on the proposed rate increase.

The general public can submit written comments to the DPU on the company’s filing by July 30, 2009.  Comments may be submitted either by postal mail or electronically; for instructions, view the Submitting Comments: National Grid Rate Changes section of the AGO website. 

As the ratepayer advocate, the Attorney General is authorized to intervene in administrative and/or judicial proceedings on behalf of consumers in connection with any matter involving the rates, charges, prices or tariffs of any gas company doing business in the Commonwealth.  In this role, the AGO represented ratepayers at the DPU's public hearings across Massachusetts, testifying at each hearing in opposition to the increase and calling it unwarranted, excessive and harmful to customers.  If the increase is approved in full by the DPU, residential customers will see an 18% increase in distribution rates and a 5.5% increase on their bill in January. 

View news coverage of the hearings:

• Worcester Telegram & Gazette: Electric rate hike hearing draws some protest (July 9, 2009)

• Patriot Ledger: Power rate increase strongly opposed at Quincy hearing; National Grid seeking 18% increase to offset costs related to ice storm (July 15, 2009)

• North Adams Transcript: National Grid Power company defends rate hike (July 15, 2009)

• Andover Townsman: National Grid proposes rate hike (July 17, 2009)

National Grid Rate Changes Trigger Public Hearings

The Department of Public Utilities (DPU) will host a series of public hearings this month in response to National Grid’s recent petition to increase electric rates in Massachusetts. 

National Grid, the Commonwealth’s largest electric utility, is looking to increase the rates that Massachusetts customers pay for electricity.  The company, comprised of Massachusetts Electric Company and Nantucket Electric Company, filed a petition with DPU this May for a $111 million increase in electric rates.  For residential customers, this is an 18% increase in distribution rates (5.5% for total bill). National Grid is requesting the DPU provide this increase as of January 1, 2010.

The purpose of DPU’s rate-setting hearings is to solicit comments from the public about the National Grid petition.  The hearings are an ideal way for you to assure that your opinions on the rate changes are heard.  The hearings will take place in the following Massachusetts communities:

• Nantucket – July 7, Nantucket High School, 7:00 p.m.
• Worcester – July 8, Worcester Public Library, 6:00 p.m.
• Andover ‐ July 9, Andover Town House, 6:00 p.m.
• Quincy – July 14, Quincy City Hall, 7:00 p.m.
• North Adams – July 15, North Adams City Hall, 7:00 p.m.

If you would like to comment on the proposed rate changes, but are unable to attend a hearing, you may also file written comments anytime before 5:00 p.m. on Thursday, July 16 (instructions are available on the Submitting Comments section of the AGO website).

For more information about the proposed rate increases, and for instructions to access National Grid’s full petition, visit the National Grid Petition section of the AGO website.