Welcome to the Department of Justice, Iowa Attorney General Tom Miller

For immediate release - Wednesday, October 10, 2001.

Contact Bob Brammer - 515-281-6699.

Miller: Propane Company to Pay Refunds

Level Propane Gases Inc. Also Must Change Business Practices

Cedar Rapids, Iowa. Attorney General Tom Miller announced Wednesday that Level Propane Gases Inc. of Westlake, Ohio, has agreed to provide restitution to customers and change business practices that were the subject of complaints by customers and several states.

In Iowa, Level Propane provides propane gas sales and delivery to customers in Northeast Iowa, Miller said.

"Consumers complained that Level Propane raised its prices sharply last year after promising to lock-in prices at lower levels," Miller said. "Customers also complained that they were sometimes hit with unexpected charges, had trouble with Level Propane's service and delivery practices, or feared running out of gas and having no heat for their homes last winter."

Miller said all Level Propane customers will receive a letter in November with information on how to make a claim for restitution from the company. Miller's Office will oversee the process.

The company has advertised that consumers may lock-in a "level" price for propane for a certain period, Miller said. In April 2000 the company sent a letter to customers thanking them for their loyalty and advising them that their propane price would be guaranteed until the spring of 2001. But prices were raised for many customers in the last part of 2000.

Consumers also complained that they were charged unexpected "underutilization fees" if they did not use a set amount of propane in a certain time period, and were charged additional fees if they sought to terminate the contract. Some consumers complained that the company charged a different price at the time of delivery than the price quoted or automatically increased the per-gallon price.

Miller said eight states were involved in the ten-month investigation and the settlement with Level Propane - Pennsylvania, Indiana, Tennessee, Wisconsin, Missouri, Arizona, New Mexico, and Iowa.

He said the settlement includes several elements:

  • Restitution for consumers. The States have approved an independent third-party administrator who will contact Level Propane customers by mail by about Nov. 15, giving them a chance to file a claim through the states if they believe they were unjustly charged. The letter will go to all customers who purchased from Level Propane since August 1, 1998. Customers will have 90 days to file a claim through the state.

  • The State of Iowa will receive $90,000 over three years from Level Propane to monitor the settlement and for litigation and consumer education expenses. Level will pay a total of $700,000 to the eight states.

  • Level's contract terms must be clearer and more specific in order to avoid charges that are unexpected by consumers. Customers also will have specific approval to use other vendors if Level Propane fails to make timely deliveries - so customers will not have to fear being left without fuel to heat homes during the winter. Level Propane will have to make numerous other changes in its business practices in order to treat consumers fairly.

  • If Level Propane fails to comply with the settlement, it will be subject to an automatic $500,000 civil penalty.

Level Propane denied the States' allegations under terms of the civil settlement, but the company is permanently prohibited from violating the States' consumer protection laws and the specific terms of the agreement relating to pricing, timely delivery, and other terms.

Miller said it appears that Level Propane has about 3-400 customers in Iowa, apparently located mostly north and east of a line arcing from Davenport to Cedar Rapids to Cedar Falls to New Hampton.

"We are aware of over fifty complaints from Level Propane customers in Iowa," Miller said. "That's a very high percentage of their customers. We believe the agreement will ensure that consumers get a fair shake from this company."

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