Illinois Attorney General Sues To Shut Down Liberty Power 'Scam'

CHICAGO — Alternative retail electric supplier Liberty Power has scammed tens of thousands of Illinois consumers out of more than $77 million over the past seven years, according to a lawsuit filed Wednesday by the state's attorney general.

The suit seeks to shut down Florida-based Liberty Power Holdings LLC, which it says engages in large-scale, deliberate fraud and outright theft in order to deceive electricity consumers into signing contracts to buy overpriced products.

"Liberty Power runs a scam," the suit alleges. "Since at least 2012, Liberty has used an illegal and deceptive marketing scheme to deceive Illinois consumers into switching their electric supplier. Commission-hungry Liberty agents, caught red-handed on audio recordings, recycle the same lies, the same false comparisons, the same artful omissions, all in the service of knowingly tricking Illinois consumers into paying more for their electricity—and lining Liberty's pockets."

The ongoing fraud scheme has overcharged Illinois consumers by an average of more than $1 million a month since 2016, according to the suit. The company claims its alternative plans offer "price protection" and are designed for people on fixed incomes. But the rates it actually charges are higher than the utility rate more than 99 percent of the time, the suit alleges.

According to the attorney general's office, the company's sales agents pretend to represent utility companies and lie to consumers about current electricity prices. They have also stolen personal information and forged signatures to switch service without the consent of the consumer, according to the suit.

"Liberty Power has defrauded consumers across Illinois. Worst of all, sales representatives focus their efforts on the elderly and people with disabilities," Raoul said in a release. "My office is committed to protecting all Illinois consumers from energy scams, and Liberty's conduct is particularly egregious. Companies like Liberty have no business operating in Illinois at the expense of our most vulnerable residents."

The investigation that led to the lawsuit included thousands of recorded sales pitches, collected from phone calls, door-to-door solicitations and in-store kiosks at chain stores, according to the release.

In a statement, a Liberty Power spokesperson said company officials take the allegations and the quality of its service very seriously.

"Liberty Power only recently became aware of the filed complaint and was never afforded an opportunity by the Attorney General’s Office to educate them about the company’s products and program or to respond to the allegations prior to the court filing. Liberty Power strongly denies the AGO's allegations which unfortunately will now have to be addressed in a court proceeding without the opportunity to engage in appropriate pre-filing discussion or engagement," it said. "The company remains committed to an excellent customer experience, including full compliance with applicable laws and regulations, and quick resolution of any issue of customer dissatisfaction."

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Nine paragraphs of the 75-page complaint provided by the attorney general's office are completely or partially redacted as a result of a non-disclosure agreement it entered into with the company during the investigation, according to court records. The section deals with Liberty's use of telemarketing and in-person solicitation vendors. Raoul's office filed a motion asking a judge to determine whether any of the material must remain redacted, and if so, requesting permission to file it under seal. Neither Liberty nor the attorney general's office immediately responded to a request for a copy of the agreement.

Customers who have enrolled with the more than 100 ARES authorized to operate in Illinois have paid more than $870 million above what they would have paid if they had stuck with their regulated public utility, according to the attorney general's office, citing data from the Illinois Commerce Commission.

According to the release, the Illinois Attorney General's Office has previously settled lawsuits or investigations into IDT Energy Inc., Major Energy Electric Services LLC, Eligo Energy IL LLC and Realgy LLC.

The office is continuing to investigate other alternative retail electricity suppliers, or ARES, and with last year's passage of the Home Energy Affordability and Transparency Act, the attorney general now has stronger tools to shutdown suppliers who engage in fraud, according to his office.

Illinois consumers may file a complaint with the Citizen's Utility Board or the Illinois Commerce Commission. The commission reported receiving an average of about 10 complaints a month about Liberty Power, more than all but a handful of other ARES, according to the most recent data available.

Read full complaint: People of the State of Illinois v. Liberty Power Holdings LLC