The April 11 article about Pinkham’s Corner Fuel of South China filing for bankruptcy highlighted the reasons for a new Maine law that recently took effect.

As the article explained, a number of customers had pre-paid for fuel. They entered into an agreement with the company to pay ahead of time for fuel in order to secure a particular price. The company agreed to supply the fuel.

While the customers followed through on their end of the agreement, the company apparently was unable to deliver all of the promised fuel or return the money received from customers. Although some might get a portion of their money back through the bankruptcy process, it’s entirely possible that none will see a penny. Nor will their tanks be filled.

It’s not a common occurrence, but unfortunately, examples of customers being left out in the cold, almost literally, are not as rare as they should be.

The governor and Legislature recognized the need for better consumer protections, and they took action this year. L.D. 1895, An Act To Protect Consumers by Strengthening the Laws Governing Prepaid Home Heating Oil Contracts, was signed into law by Gov. Paul LePage on March 30.

The new law (PL 2012, Chapter 574) won’t help customers of Pinkham’s Corner Fuel, but it may reduce the likelihood that other Maine homeowners will share their fate.

Although it’s not possible to completely prevent similar situations in the future, the law change responds to several recent examples of dealers taking money from Maine consumers, but failing to supply the fuel. In the past 18 months, about 10 fuel companies either went out of business or had significant problems and delays in fulfilling their contracts.

Many legislators were concerned about this issue, and they responded quickly. Reps. Kerri Prescott, R-Topsham, and Alex Cornell du Houx, D-Brunswick, played key roles.

Maine people can have confidence that the vast majority of fuel dealers in our state are honest and reputable. They serve their customers well and contribute to our communities in many ways. Several dealers, in fact, as well as the Maine Energy Marketers Association, participated in the process of developing this new law, along with the Department of Professional and Financial Regulation.

As in any profession or industry, however, there are a few unscrupulous dealers and circumstances occasionally overwhelm businesses. The law was changed to discourage these cases in which a dealer doesn’t meet its obligation.

Specifically, the new law requires oil dealers who plan to offer prepaid contracts for home heating oil, kerosene or liquefied petroleum gas to register their intent to offer such contracts with the commissioner of the Department of Professional and Financial Regulation by June 30 of each year. These dealers must file a report by Oct. 31 each year to indicate the manner of compliance.

The commissioner must refer to the attorney general any registered dealer who fails to provide the required report or who makes a false statement, which would be a violation of the Maine Unfair Trade Practices Act.

Individuals who plan to use a prepaid contract for the next heating season are encouraged to contact the Department of Professional and Financial Regulation (www.maine.gov/pfr) this summer to find out if their dealer has registered.

Ultimately, no law change can prevent fuel dealers from going out of business nor stop all unscrupulous activity. Each of us, as consumers, should be mindful of the risks, as well as the potential benefits, of entering into prepaid contracts. We should read contracts carefully and do our homework regarding the fuel dealer we select.

It’s hoped that this new law will discourage inappropriate behavior by the few unscrupulous dealers, but there’s no guarantee.

As consumers, we must do our part to safeguard our money.

Anne L. Head is commissioner of the state Department of Professional and Financial Regulation.


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