Gas company leads elderly residents into unknowingly agreeing to pricey contracts, recordings show
Elderly say gas company offered lower heating rates; their bills doubled instead
BURLINGAME, Calif. (KGO) -- Many of us turned up the heat during recent cold weather and watched PG&E bills go up with it. Now several Bay Area residents say they got a phone call offering to save money on gas -- but they wound up getting switched to a third-party gas company instead. Elderly residents said they had no idea they agreed to a binding contract -- and on top of that, their gas bills went up, not down.
"Are you aware that you will receive a welcome packet from AAA that will include pricing and other conditions?" said a voice on the recording.
94-year-old Ramona Martinez doesn't remember getting this call.
"You know, I don't know what you're talking about there," said Martinez.
Martinez listened to a recording of that call. AAA Gas Services of Oklahoma says the recording proves Martinez agreed to a binding contract.
"And you are choosing AAA Natural Gas as your energy supplier under the Customer Choice Program?" said the representative on the recording.
"I can't understand you very well, so let's get on with what are we doing?" said Martinez while listening back to the recorded call.
Martinez doesn't realize this is a recording as 7 On Your Side played it back for her and her trustee.
"AAA will charge you $1.20 per therm which may be higher or lower than what PG&E would charge you..." said the AAA representative on the call.
"Oh, come on, get off, stop, stop it," Martinez said to the recording.
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"You're taking advantage of someone who's 94 and has dementia," said Martinez's trustee Ingrid Kerstan of Burlingame.
Martinez just celebrated another birthday. She has advanced dementia and receives 24-hour care.
Kerstan was surprised to see a PG&E notice saying Martinez had switched her gas supplier to AAA Gas Services. How did that happen? Kerstan called AAA.
"And they said, 'Well we do it over the phone and we have phone verification,' and I said, 'Well I want to disconnect it,' and they said it will take 30 to 60 days and a $100 cancellation fee... I said, 'No, no, no, no,'" Kerstan said.
AAA said Martinez agreed to a 36-month contract, and the phone recording proves it. However, Kerstan is not convinced.
"There's a series of yes and no questions... and then you hear just 'yes'... and I can tell it's not Ramona," said Kerstan.
On the recording, an agent reads off contract terms, and then asks Martinez if she understands each one, yes or no.
"AAA will charge you a 5 cents per day customer fee to attach their charges to your PG&E bill and keep the billing seamless. Is this your understanding?" said the AAA representative.
There's a 10 or 15-second delay after each question, then, a one-word reply: "Yes."
Martinez says nothing but "Yes." And it's clear she doesn't understand.
"This is not even her voice, and the 10 to 15-second delay after every single question is suspicious in and of itself," said Kerstan.
Still, AAA said Martinez would have to wait 60 days and pay a $100 fee to cancel the contract.
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Others have had similar experiences with the company.
"We all heard the recording... you can clearly tell my mother did not know what she was signing up for," said Karin Marke of her 90-year-old mother, Mary.
Oakland resident Marke said her mother thought she was getting a discount on her gas bill. Instead, she wound up switching her gas supplier from PG&E to AAA.
"They basically said your mother agreed to it, and you can't cancel it for two months and there's a penalty if you do and that's where I said, this doesn't sound right," said Marke.
AAA sent Marke the phone recording as proof, and Marke says it proved questionable tactics.
"They keep pushing, pushing, pushing and get her to say yes... it either made you angry or want to cry," said Marke.
The recorded phone call between Mary and the AAA agent went as follows.
Agent: Do you agree that the agent --
Mary: Excuse me ma'am but I've been answering questions for the last hour.
Agent: I totally understand. So do you agree that the agent has not offered you any other incentives, rebates or gift cards...
Mary: I guess so, but this is the discount, is that not true?
Agent: I don't work for AAA. So let me read the statement again, do you agree the agent has not offered you any incentives...
Mary: I guess I'll say yes but that's only because I'm getting tired.
Agent: I just need a yes or no for the recording.
"It was painful... I shed a few tears. She's so vulnerable," said Marke.
"Please state the name as it appears on the utility bill," said the AAA agent on the recording.
"I have no idea at this point. My husband recently went to heaven, so it used to come in his name," said Mary on the call.
"After this three-day period you may still cancel your service at any time..." the agent continued.
"Oh my god, this is so complicated, Jesus mercy... God, this is too complicated," said Mary on the recording.
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"She's exhausted from a long call... the lady continued to coax her which is so... I hate the predatory nature of these," said Marke of the recorded call.
So AAA began billing Mary -- but instead of saving money, Mary's gas bill actually doubled. Same for Ramona Martinez.
Mary's utility bill shows PG&E would have charged her $90 for the gas she used last month. AAA charged $187 dollars -- more than double.
Martinez's bill shows PG&E would have charged her $130 for gas. AAA charged $260 dollars.
AAA issued the following statement to 7 On Your Side:
AAA, like all Core Transport Agents, is directly regulated by the California Public Utilities Commission and follows all applicable regulations. AAA offers alternative pricing structures from PG&E, including AAA's fixed rate program, which offers a rate that does not change from month-to-month with the market price of gas.
A live, independent third-party explains and obtains customer consent to each sale. This includes informing the customer that their gas charges may be higher or lower than what PG&E would charge them, explaining that PG&E's transportation and other charges will still apply, permitting the customer to cancel at no charge within 3 business days, and providing an explanation of the cancellation policy and fee. The third-party verification service has no financial interest in the outcome of the call.
AAA strives to resolve all customer concerns on an individual basis, including waiver of the cancellation fee where appropriate. Many of these concerns arise from PG&E's switching policies and billing practices over which AAA has no control.
AAA neither targets nor discriminates against any customer based on age, race, national origin, orientation, or any other basis. While AAA cannot comment on individual customers or their accounts due to confidentiality restrictions, AAA has reviewed the names mentioned in your story and will reach out to them to address their concerns.
The state Public Utilities Commission allows third-party gas suppliers to sell you gas for heating and cooking. However, those companies do not deliver the gas to your home. You still pay PG&E for that. We've found it's often more expensive to buy from a third party. Make sure you check before you sign, and help elders do the same.
Take a look at more stories and videos by 7 On Your Side.
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