Local residents cash in on Ferrellgas lawsuit
When Dean Leitheiser of rural Detroit Lakes signed up to get propane service with Ferrellgas, L.P. in 2009, he had no idea a battle was about to begin between him and one of the largest fuel providers in the country.
"I got my first bill and thought, 'wow, propane is pretty steep now'," Leitheiser said, as he pinned the bill to his refrigerator.
But when his son-in-law came over and saw the amount owed, he told Leitheiser that his propane company charged half that.
"They had me at like $4.30 a gallon, I think," Leitheiser said.
So, he says he called Ferrellgas and was routed to the Grand Forks location, where he says they refused to tell him how much gas was 'going for' that day.
"I had called four or five other gas companies, and they all told me right away, but Ferrellgas wouldn't," said Leitheiser, who added that Ferrellgas did adjust his bill to a much lower amount.
Next month however, it happened again.
Leitheiser called to have it straightened out just like before.
He says four months later, Ferrellgas was still sending him outrageous bills that were double what they should have been.
"By this time I was pretty ticked off, so I called them to tell them to come and get their tank out of my yard," said Leitheiser, "and I asked them, 'am I the only one this is happening to? I think not!'"
After being charged a $100 fee for tank pick up, "which I just paid to get them out of my life," Leitheiser then learned that his church, a Ferrellgas customer, was also being over-charged .
"I knew this company was getting a lot of money from people who didn't know the difference -- elderly people on a fixed income or county employees who worked with the fuel assistance and just paid the bills without thinking anything of it," said Leitheiser, "It was just wrong."
Around the same time, Ronald Miller from rural Verndale was also struggling with Ferrellgas.
Miller, who used wood for his main source of heat and propane for a backup, began burning more wood to save money.
He says he only went through a tank of propane once every couple of years.
"Then one day I got a bill in the mail that said I had to pay a $200 'no-usage' fee because I hadn't refilled my tank that year," said Miller.
Like Leitheiser, Miller called the company to complain, but didn't have the same luck in getting the fee taken off.
"I told them I wasn't paying it because they never told me anything about these fees, but then the next month it was still on the bill with interest," said Miller, who called the company again.
"And the lady told me that I was, too, going to pay it and then she threatened to pull my service and hung up on me," said Miller.
That's when Miller contacted Minnesota Attorney General Lori Swanson.
"It really made me mad because that year, we heard nothing but record profits for these fuel companies," said Miller, "and if that's how they were getting it, was through corporate greed, that's sad."
The Minnesota AG's office then filed a class action lawsuit against Ferrellgas, which they recently settled for $450,000.
The settlement was approved by Ramsey County District Court Judge John B. Van de North.
The money will be used to refund customers who have a valid claim they paid undisclosed charges and fees.
Ferrellgas has also been ordered to directly refund customers who paid the 'no-use' or 'low-use' fees and requires the company to disclose fees in a conspicuous and clear manner.
Ferrellgas must also now disclose the price it will charge consumers when they're ordering propane.
In a statement given to the Detroit Lakes Newspapers, officials with FerrellGas's Corporate Headquarters released this statement:
"Ferrellgas is extremely pleased with the settlement. We feel that while we have long been a propane industry leader with regard to consumer disclosures, this process has been an opportunity to re-examine our practices and make improvements where necessary.
"We look forward to continuing to provide excellent service to our thousands of customers in the state of Minnesota."
When asked about the 'low-usage' and 'no-usage' fees, Director of Corporate Communications Jim Saladin said the fees were to help absorb some of the cost of providing propane tanks to their customers.
"We retain ownership of the tanks, which are assets that are worth a lot of money," explained Saladin, "and we deploy these assets so that they can make money for the company and to provide service to the customer. In an agreement with the customers, which we thought were clearly stated, it said that if they don't use a minimum amount per year to help us provide those assets, then we reserve the right to assign a fee."
Saladin goes on to say the company got rid of the 'no-use' and 'low-use' fees in Minnesota on its own accord before the lawsuit. But it still implements those fees in other states.
On a side-note, Ferrellgas does already charge customers using its tanks a $75 a year rental fee to do so.
With regards to Dean Leitheiser's story of overcharges, Saladin says while he does not know the specifics of that case, he does not believe it to be a widespread problem.
"We provide energy to more than 50,000 people in Minnesota, and we are one of the largest retailers in the U.S.," Saladin said, "and if we were consistently treating our customers that way, that wouldn't be true."
Saladin adds that the Ferrellgas representatives who wouldn't tell Leitheiser what gas was 'going for' that day, probably needed more information on who he was as a customer.
"Because different customers are charged different prices according to ... if they are buying in advance; do they have a contract; are they a large volume user or small volume user ... It's not one price fits all," said Saladin.
The Minnesota Attorney General's Office is now actively searching for Ferrellgas customers to participate in the settlement fund.
"When it comes to energy, consumers already sort of have their hands tied," said Ben Wogsland with the Minnesota AG's office, "so it makes it that much more important for these companies to be upfront with their customers so they can make informed decisions."
For more information on how to be a part of the settlement, contact the Attorney General's Office at 651-296-3353 or 800-657-3787.