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A propane supplier will pay $450,000 to settle a lawsuit brought by the Minnesota attorney general alleging that the company didn't properly disclose some charges to consumers.
The settlement with Ferrellgas, announced Tuesday by Attorney General Lori Swanson and approved by a Ramsey County district judge, requires the supplier to change some of its business practices and allows consumers to file for reimbursement for undisclosed or inflated charges.
"For many people, propane is a costly necessity to heat their homes," Swanson said. "Propane pricing should be transparent so that consumers can make informed choices about their purchases."
Ferrellgas admitted no wrongdoing and said it is "extremely pleased" with the settlement.
"We feel we've long been a leader in our industry regarding fee disclosure and we feel this [settlement] allows us to continue that tradition and continue our great service to customers in Minnesota," said Jim Saladin, spokesman for the company based in Overland Park, Kan.
That's not how Dan Wiborg of Minneapolis saw things. He complained to the attorneys general in Minnesota and Wisconsin that Ferrellgas charged wildly different rates to members of his small rural condominium association in Hayward, Wis.
"I would be charged $2.19 a gallon, and my mother-in-law was charged $3.49 a gallon," Wiborg said. After he complained, Ferrellgas agreed to provide association members below-market prices for a year, he said.
Wiborg applauded the settlement, although his eight-cabin condo association may not benefit from it. That may depend on whether the gas was ordered in Minnesota or Wisconsin, said Ben Wogsland, a spokesman for the Minnesota attorney general's office.
Ferrellgas has about 50,000 Minnesota customers, but it's not known how many will get restitution. Wogsland said consumers must submit billing records. To make a claim, contact the attorney general's office at 651-296-3353 or 1-800-657-3787.
The lawsuit alleged that Ferrellgas charged undisclosed or poorly disclosed fees, including "low usage" and "no usage" fees of up to $199 for not using enough propane. Ferrellgas agreed to clearly disclose prices, and to refund all no-use and low-use charges in Minnesota.
The company said it stopped those fees before the lawsuit and already has refunded them. Saladin said about half of the settlement funds will offset the attorney general's costs, but that enough money should be left over to provide restitution.
Iowa obtained a consent judgment from Ferrellgas in October requiring more-transparent pricing and payment of $25,000 in investigative costs. Ferrellgas settled another lawsuit with Arkansas in December; that state had alleged that the company deceived consumers by unilaterally modifying contracts. It paid $85,000 toward investigative costs in that case.