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Attorney General James Announces Restitution and Penalty Payments from Multiple Energy Service Companies for Consumer Fraud

LongIsland.com

Ambit Energy Required to Change Practices and Pay $1.5 Million in Penalties for Deceptive Practices.

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New York, NY - February 21, 2019 - Today, New York Attorney General Letitia James announced that refund checks are being issued to consumers of Energy Plus Holdings LLC and Energy Plus Natural Gas LLC (collectively, “Energy Plus”) as a result of a 2017 settlement with the Office of the Attorney General. Attorney General James also announced a settlement with Ambit Energy Holdings, LLC, Ambit Marketing, LLC and Ambit New York, LLC (collectively, “Ambit”). Both engaged in deceptive practices that resulted in consumers paying more for energy services when they were promised savings. 
 
“Thousands of New Yorkers will get their money back after they were deceived into paying for more expensive energy services,” said Attorney General Letitia James. “Energy Plus and Ambit are just two of the multiple unscrupulous energy service companies that the Attorney General’s Office has challenged in our ongoing effort to protect consumers. We have zero tolerance for companies seeking to defraud New Yorkers out of their hard-earned money.”  
 
Over $700,000 in payments are being distributed to eligible current and former customers of Energy Plus stemming from a 2017 settlement with the Office of the Attorney General. As part of its investigation, the Office found that the company engaged in a number of deceptive practices that resulted in consumers paying more for their energy service than they would have paid to their local utilities.   
 
In particular, the investigation found that Energy Plus: 
 
  • Lured consumers with false promises of savings, then swindled them into paying much higher bills;   
  • Failed to disclose material terms such as conditions for receiving cash back; 
  • Deceptively implied that cancellations could be processed immediately.    
The Better Business Bureau Serving Metropolitan New York administered the Attorney General’s restitution program based on claims submitted by consumers who were Energy Plus customers prior to the settlement. Approximately 2,800 residential consumers and small businesses will receive payments.  
 
The payment distribution for Energy Plus customers comes on the heels of a settlement the Office of the Attorney General reached in December with another ESCO - Ambit Energy Holdings, LLC, Ambit Marketing, LLC and Ambit New York, LLC (collectively, “Ambit”). Ambit’s settlement, which resulted in a $1.5 million penalty, stemmed from an investigation that found that Ambit: 
 
  • Misrepresented that consumers would achieve savings;   
  • Signed up consumers with Ambit without their consent;   
  • Switched consumers to a more expensive energy plan without adequate notice;   
  • Promised its marketers high incomes that were not generally achieved.   
Because Ambit previously agreed to provide more than $20 million in refunds to its customers in a class action settlement, the Attorney General did not seek restitution in that case. 
 
The Attorney General’s settlements also required Energy Plus and Ambit to take measures to prevent deceptive practices in the future, including adequate training of customer service representatives, refraining from misleading advertising about savings, and implementing appropriate disciplinary procedures for violations of the law.  
 
Energy service companies (or “ESCOs”) often purchase energy on the open market and then sell it to consumers. Utilities still deliver the energy to consumers, but consumers can choose to purchase their energy directly from the utility or through an ESCO.  The Attorney General’s ongoing investigation into ESCOs has returned more than $5 million to consumers, including nearly $2 million to customers of Columbia Utilities Power LLC and more than $1 million to customers of HIKO Energy, LLC.    
 
Consumers can protect themselves from unscrupulous ESCOs by remembering the following tips:
 
  • If you receive an offer for energy services, make sure you understand whether the offer is from your utility or an ESCO. 
  • You do not have to choose an ESCO to supply your gas or electricity. You may choose to use your utility as your direct supplier. 
  • Make sure you understand whether an ESCO contract involves an early termination fee and, if so, the fee amount and the length of your contract commitment. 
  • Before accepting any offer, ask the ESCO to show you how its rates have compared with your utility’s rates during each month in the past year. This can help you judge how competitive the ESCO’s rates may be in the future. 
  • Remember that you have the right to cancel an ESCO contract with no obligation within three days if you change your mind. 
  • If you are uncomfortable with how a marketer behaves, end the conversation with a request to look over their offer in writing so you can get back to them when you have made a decision free of any pressure. 
  • If you receive a notice that your service is being switched to an ESCO and you did not authorize the switch, contact the utility and the ESCO immediately to tell them to halt the switch. If you are unable to get an ESCO switch cancelled, contact the New York Public Service Commission at 1-888-697-7728.  
The Energy Plus and Ambit investigations were handled by Assistant Attorney General Kate Matuschak under the supervision of Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia, all of the Consumer Frauds and Protection Bureau.  The Consumer Frauds and Protection Bureau is part of the Division of Financial Justice, which is led by Executive Deputy Attorney General Chris D’Angelo.