Attorney General Cuomo Reaches Agreement With Wny Natural Gas Provider After Consumer Complaints

BUFFALO, N.Y. (November 10, 2009) - Attorney General Andrew M. Cuomo announced today that his office reached an agreement with a Western New York gas provider after consumers complained about the company using deceiving tactics.

New York Energy Savings Corporation, d/b/a U.S. Energy Savings, has agreed to change both the name of the company and the color scheme of uniforms so that consumers will not think that the company is affiliated with the local regulated utility. The new agreement also implements a $50 cap on cancellation fees for consumers who cancel contracts after 30 days. Previously, the energy service company (ESCO) was found to be charging some consumers more than $600 in such fees.

“Representatives of this company went door to door, and were often mistaken for employees of the local utility,” said Attorney General Cuomo. “Consumers ended up signing contracts under that false belief, and that’s when the complaints started. To make an informed choice for an energy provider, homeowners must have all facts. This agreement will make sure this company changes its methods so homeowners know what they are signing up for.”

In 2008, Attorney General Cuomo’s Office reached a settlement with U.S. Energy Savings, requiring the company to waive hundreds of thousands of dollars in residential consumer termination fees and pay $200,000 in costs and penalties to the state. The settlement also implemented a series of comprehensive reforms to ensure that customers are given accurate, up-front information regarding their service agreements by the company’s sales staff.

The Attorney General’s Office recently began receiving additional complaints from consumers who indicated that the name of the company and the dark blue color scheme of the representatives’ uniforms misled homeowners to think they were affiliated with the local regulated utility. Cuomo’s office promptly amended its 2008 agreement with the company requiring the company to stop using the name “U.S. Energy” and to change its representatives’ uniforms from dark blue to green to avoid confusion.

The Attorney General’s original settlement required - for the first time - an ESCO to allow consumers the right to cancel their agreements without termination fees any time from the date that the consumer signs the agreement to up to 30 days after the date of the first natural gas bill where U.S. Energy Savings is listed as the gas supplier. To further protect consumers, the amended agreement requires the company to implement a $50 cap for its early termination fees for consumers who cancel contracts after 30 days.

ESCOs began competing with regulated utilities in 1996 to sell natural gas directly to consumers in New York state. ESCOs, however, are not regulated like utilities and have become the subject of many consumer complaints.

Consumers who believe they have been subjected to deceptive business practices by an ESCO or any other business may contact the Attorney General’s Buffalo Regional Office at 716-853-8404.

The case was handled by Assistant Attorney General James Morrissey of the Buffalo Regional Office with assistance by Senior Fraud Representative Karen Davis, under the supervision of Assistant Attorney General In-Charge Russell Ippolito and Deputy Attorney General for Regional Affairs J. David Sampson.

 

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