Consumer Alert: What to Look for When Purchasing Home Heating Oil This Fall

HARTFORD - The Department of Consumer Protection (DCP) is advising the public about different contract types when purchasing home heating oil this fall.

The DCP Food and Standards Division regulates fuel sales and accepts consumer complaints regarding fuel, oil, and propane in Connecticut. The division will review alleged contract violations under the Connecticut Unfair Trade Practices Act.

DCP does not set or regulate prices for oil and gas products.

Early fall is typically when consumers search for local businesses to supply home heating oil. Most businesses will offer a long-term prepaid contract to lock in a fuel rate, protecting consumers from potential price spikes. It is possible that businesses can struggle to secure their own fuel supply due to market fluctuations. Consumers are not required to pre-buy home heating oil, however DCP recommends that if you do purchase pre-paid oil, those contracts should be negotiated and signed by October 31.

"Searching for the best rate for home heating oil can be challenging," said DCP Commissioner Bryan T. Cafferelli. "Although standard market fluctuations are hard to predict, our role is to provide consumers with the tools and information to help make the best decision for their household. Before you lock in a contract, understand the different contract types, what payment plan you are committing to, and if something is unclear, ask questions."

"No one should be taken advantage of just trying to keep their family warm," said Attorney General William Tong. "Fast-moving heating oil markets, confusing contracts and pricing options can make an already stressful event even more difficult to navigate. Consumers should understand exactly what they're agreeing to before signing a contract. Anyone who believes they're being deceived or treated unfairly should report it. We will not hesitate to use every ounce of our authority to stop any unfair practices and to protect Connecticut families."

Before signing a contract, consumers should know their tank capacity and what they use on average every year. This prevents buying too much oil. In addition, consumers should schedule furnace cleanings in the fall, as dirty tanks may waste oil.

When reviewing a contract, consumers should know the following terms:

• Fixed or cap price: A fixed price means that the consumer has a locked rate per gallon. A cap price means there is a maximum price the consumer can pay, but the price may drop if the market drops.
• Pay-As-You-Go plan: This type of contract means that the consumer must call ahead of each delivery and pay the current market price.
• Contract Security: This means a company that collects pre-paid funds for future deliveries must ensure those funds are secure.
  • In Connecticut, dealers must legally back contracts with either future physical supply contracts for 80% of their commitments or a surety bond for 50% of consumer funds.
• Excess Credit Refunds: Consumers should confirm in writing that any paid, undelivered fuel credit will be reimbursed. This must occur within 30 days of contract expiration.
• Automatic Default Terms: Read the contract closely for any hidden exit fees or terms that void your fixed rate. For example, what happens if you miss a payment.

Before consumers sign the contract, they should ask the following questions:

• How exactly are my prepaid funds secured against business failure or insolvency (inability to pay debts)?
• Are there any exit penalties or automatic rolling contract provisions if I choose to cancel?
• Does this plan include automatic delivery, or do I need to monitor my tank and request fills? What specific hidden surcharges apply for off-hour, weekend, or emergency deliveries?

How to resolve a dispute:
Customers who experience delivery failures, contract violations, or unfair sudden price hikes should keep a record of all contracts, missed delivery dates, and communications with the business, including phone calls. It is recommended that the consumer send an email or letter by Certified Mail to the business that explains the contract violation and a deadline for resolution.

If the business does not help to resolve the issue, consumers may file a complaint with the Department of Consumer Protection by sending an email to [email protected] or by submitting through the online complaint portal.