Elkton Propane Gas Supplier Settles with Attorney General’s Office

BALTIMORE, MD (August 6, 2008) - Attorney General Douglas F. Gansler announced today that his Consumer Protection Division has reached a settlement with an Elkton, Maryland propane gas supplier over the company’s imposition of a “Government Agency Regulatory Compliance fee" ( “Government Compliance fees”). The company, Schagrin Gas Company, Inc., agreed to stop charging its customers fees unless they were previously disclosed in their service agreements. The company will also provide its existing customers with a credit for the Government Compliance fees that they were previously charged.

Schagrin Gas Company, Inc., at 226 South Bridge Street in Elkton, provides liquid propane gas to over 17,000 customers in Maryland. The Consumer Protection Division alleged that Schagrin Gas violated the Maryland Consumer Protection Act by having consumers enter into multi-year service agreements and then charging consumers an additional Government Compliance fee, which had not been disclosed in the contracts. The Division further alleged that Schagrin Gas misstated the purpose and the reason of the fee to consumers.

Schagrin Gas denies it violated the law. However, in order to settle the matter, it agreed to stop charging customers fees unless the fee was first disclosed in its contracts, to not mislead consumers concerning the purposes of any fees it charges, and to provide its existing customers with account credit based on the Government Compliance fees it had previously charged them. Under the settlement, the company also agreed to pay the Consumer Protection Division $3,000 for its costs.

“Consumers cannot be asked to pay fees unless they are adequately disclosed in their service agreements," said Attorney General Gansler. The Attorney General urged consumers to make sure they know all of the fees before entering into a contract and then to check all bills to make sure that they are only being charged fees to which they agreed.