Ark. AG settles with propane co. over deceptive trade practices

Legal News Line Dec. 22, 2010, 8:12am


LITTLE ROCK, Ark. (Legal Newsline) - Arkansas Attorney General Dustin McDaniel announced on Tuesday that he has reached an $85,000 agreement with a liquid propane company that allegedly violated the state's Deceptive Trade Practices Act. The company, Ferrellgas, allegedly unilaterally modified contracts with Arkansas consumers. A lawsuit filed by McDaniel alleged that the company replaced 45,000 existing contracts in 2004 with a 23 page "Master Agreement for Propane Sales and Equipment Rentals," which altered basic and vital provisions of the company's original two page contracts. Ferrellgas allegedly tried to collect a number of additional fees, even though many customers never agreed to any such contract modification. "Arkansans should never face a situation where they have to choose between paying unauthorized fees or going without heat, and this agreement prevents that scenario from ever taking place." McDaniel said. "The agreement also provides other key protections to the company's customers. I appreciate the company's cooperation with our investigation and accommodation of our concerns." Under terms of the settlement, the company will allow certain customers a no-cost termination option. In addition, Ferrellgas agreed to not enforce certain provisions of the "master agreement" in the state of Arkansas. Those provisions include one that automatically binds consumers to the agreement if a consumer retained propane purchased from Ferrellgas on his or her property. The company has also agreed to restrictions in how it uses minimum-use fees or low-use fees, and will reimburse consumers for unused propane in a rented tank if the agreement with Ferrellgas is terminated. Ferrellgas, which has made no admission of liability, will also remove its prohibition on partial tank fills and enact stronger guidelines to protect consumers who claim to own their tanks but cannot produce ownership paperwork.

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