The state attorney general’s office has ordered Massachusett’s-based propane purveyor Osterman Propane to pay $16,000 in restitution to its customers along with $7,500 to the state for failing to disclose certain fees on the accounts of 89 customers.
The AG’s office levied the penalty last week after a nearly nine-month investigation, said an official involved in the case. The penalty forms part of an agreement the AG’s office approved Dec. 7 between Osterman Propane and the state.
The customers involved all had commercial accounts, said Assistant Attorney General Justin Kolber, but the small size of their propane tanks meant customer protections applied that don’t with most larger commercial accounts. The Legislature instituted those protections in 2012 under a law regulating propane transactions for tanks smaller than 2,000 gallons.
“Osterman … didn’t realize there had been an update, so they didn’t change their practices so that those commercial accounts got the right protections,” Kolber said.
The affected Osterman customers all had commercial accounts with the propane business, Kolber said. All 89 customers had been newly placed under the relevant consumer-protection laws in 2012, according to the state’s settlement with Osterman.
Larger customers enjoy fewer regulations meant to protect consumers because propane customers with tanks larger than 2,000 gallons are expected to be relatively sophisticated, commercial entities with experience negotiating their own terms in contracts, Kolber said.
But businesses with propane tanks smaller than 2,000 gallons receive the same consumer protections that apply to every other propane customer with a small tank, Kolber said.
Those customers must receive itemized bills showing labor and trip charges that aren’t necessarily required for larger customers, Kolber said.
The fine and restitution the AG’s office ordered from Osterman Propane resulted from an investigation initiated following multiple tips the AG’s office received last winter, he said.
The AG’s office conducts most of its investigations in response to consumer complaints, Kolber said, and this incident was no different in that respect.
The Vermont Attorney General’s office takes complaints by phone, at (802) 656-3183, and by email at consumer@uvm.edu. Consumers or businesses who wish to file a complaint against a business can also do so by filling out the AG’s online complaint form found here.
Representatives from Osterman Propane did not return requests for comment, and calls to Osterman’s attorney in the case, Joshua Diamond, of Montpelier-based Diamond & Robinson, went unreturned as well.
Osterman Propane is based in Whitinsville, Massachusetts, and in 2015 had 2,500 Vermont propane customers.
