NY AG Gets $1.5 Million From Energy Company For Deceptive Practices

NEW YORK STATE — New York Attorney General Letitia James announced that she has secured $1.5 million for customers who were deceived out of their money by Major Energy, an energy service company. The money is part of an agreement that settles a lawsuit James brought against the company in January.

The settlement requires that the Texas-based Major Energy — which serves customers in in New York City, Long Island, the Hudson Valley, the Capital Region, the North Country and Western New York — stop its deceptive practices and provide restitution to customers in New York who were misled into paying more for electricity and heating.

“Deceiving New Yorkers into spending more money to keep the lights on and the heat running is unacceptable and illegal,” said James. “Major Energy overcharged New Yorkers for essential services through false promises and aggressive sales tactics. My office will not tolerate greedy companies that try to line their pockets by lying to New York consumers. This action should send a clear message that these practices are unacceptable, and we will stop them."

Major Energy is an energy service company, known as ESCOs. When purchasing gas and electricity, consumers can get it directly from their local utility, or contract the purchase through an ESCO. ESCOs purchase energy on the open market and then resell it to consumers. Because ESCOs buy the electricity and gas from the same sources as the utility companies, there is no difference in the actual electricity and gas that is purchased by consumers, regardless of whether it is supplied by an ESCO or a consumer’s local utility.

An investigation by the Attorney General's office found that Major Energy's door-to-door salespeople and telemarketers lured consumers with false promises of savings, and then charged them significant, sometimes illegal, early termination fees when they tried to get out of their contracts.

Many consumers did not even realize they had been enrolled with Major Energy, since sales representatives dressed like workers from the local utility and even enrolled consumers without their consent. Major Energy then made it harder for consumers to cancel their contracts by simply not answering the phone.

Major Energy services customers across the state. The deceptive practices dated back to 2011, James said.

As a result of the agreement, Major Energy is required to pay $1.5 million in restitution to impacted consumers. In addition, Major Energy must take action to prevent deceptive practices in the future, including training customer service representatives, recording telephone communications between customers and sales representatives that result in a sale, not using misleading marketing that implies savings, and regularly monitoring sales calls.

New Yorkers who bought electricity from Major Energy may be eligible for a refund if they were subject to certain deceptive practices. New Yorkers can submit a complaint online or call (800) 771-7755 to have a complaint form sent by mail.

The Attorney General's office offered these tips to help consumers make sure they're not scammed by ESCOs:

• 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.