Refund Case Study

An example of a wrongfully renewed contract is a five year natural gas supply contract which was signed in 2002, became effective in 2003, and was set to expire in 2008.  Direct Energy wrongly renewed this contract without consent in March 2008 for a one-year term at $0.399 per cubic meter, and again in March 2009 for $0.499 per cubic meter.  Furthermore, when an attempt was made to cancel this 'renewal' contract, Direct Energy stated that administration and early termination fees applied.  These fees were paid in order to have the contract cancelled and the service returned to the far lower rates ($0.147 per cubic meter, at the time) of Enbridge Gas Distribution, the natural gas distributor. 

It can be a long and frustrating process to obtain a legally entitled refund, and my hope is that the information contained on this site will make it easier for others.  Telephoning or mailing Direct Energy Customer Care can be virtually useless - despite explicitly describing why this contract was no longer binding, Customer Care treated it as if it were.  It was not until registered letters were sent to both Direct Energy Customer Care and their General Counsel did the customer receive (a) a full refund of the difference between the rates charged by Direct Energy and the rates which would have been charged by Enbridge Gas Distribution from March 2008 to when Direct Energy was removed as the gas supplier, and (b) a full refund of administrative and early termination fees and taxes paid.  The letter below from the Direct Energy President's Office was accompanied by a refund check for almost $1000.