What to Know
NY reached a half a million dollar settlement with an energy service company that illegally deceived consumers in the state, officials say
$550,000 settlement with Liberty Power Holdings was reached as part of an ongoing investigation into energy service companies
The Attorney General's Office says Liberty falsely promised consumers lower prices and switched their service provider without their consent
New York reached a half a million dollar settlement with an energy service company that illegally deceived consumers in the state, authorities say.
New York Attorney General Eric Schneiderman said Wednesday that a $550,000 settlement with Liberty Power Holdings was reached as part of an ongoing investigation into energy service companies (ESCO) that allegedly uncovered the company’s contractors and subcontractors lured New York City and Westchester area consumers with false promises of savings but then charged them pricey early termination fees of $200 or more when they tried to get out of their contracts.
The Attorney General’s Office says that sales representatives used deceptive means to enroll consumers, including claiming to represent a consumer’s current utility provider.The company allegedly also switched customers' service providers without their consent.
Liberty conducted door-to-door sales and telemarketing targeting customers primarily serviced by: Con Edison in New York; Con Edison in Westchester; Niagara Mohawk Power; Central Hudson Gas & Electric; Orange & Rockland Utilities; Rochester Gas & Electric; and New York State Electric & Gas Corp.
According to the settlement, Liberty will implement new restrictions on their marketing practices to prevent future frauds and pay $550,000, which will be used to refund eligible consumers.
“Today’s settlement returns more than half a million dollars to consumers who were deceived by Liberty, which falsely promised savings and enrolled consumers without their consent,” said Schneiderman in a statement. “My office will not tolerate exploitative businesses that prey on unsuspecting New Yorkers and their hard-earned cash.”
The Attorney General’s continuing investigation into ESCOs has recovered more than $5 million for consumers, including almost $2 million to customers of Columbia Utilities Power, more than $1 million to customers of HIKO Energy and $800,000 to customers of Energy Plus Holdings and Energy Plus Natural Gas.
In 2013, the Public Service Commission suspended Liberty’s authorization to conduct door-to-door marketing in New York, the first time such an enforcement action was taken against an energy service company in New York. Although Liberty subsequently revised its marketing program, as recently as 2017 the Commission allegedly continued to receive complaints about the company’s sales practices.
Energy service companies 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. Liberty used its status as an ESCO to charge its customers higher prices than they would have paid if they purchased energy from their utilities, the Attorney General's Office says.
The settlement requires Liberty to pay more than half a million dollars for consumer refunds.
“The settlement also requires Liberty to take measures to prevent deceptive practices in the future, including adequate training of customer service representatives, recording communications between customers and sales representatives that result in a sale, refraining from misleading marketing and advertising that implies savings, regularly monitoring customer service calls, and implementing appropriate disciplinary procedures for violations of the law,” according to the Attorney General’s Office.
Impacted New Yorkers can submit complaints online or by phone at 800-771-7755.