Attorney General James sues Energy Service Company for overcharging and deceiving consumers
Major Energy New Yorkers overburdened despite promising savings,
and Consumer Energy Service Providers Switched Without Consent
NEW YORK – New York Attorney General Letitia James today filed a lawsuit against Major Energy Services LLC and Major Energy Electric Services, LLC (together, Major Energy) for overcharging and misleading New York consumers with fake advertisements. An investigation by the Office of the Attorney General (OAG) found that consumers across the state paid tens of millions of dollars more for Major Energy’s services than they would have paid their local utilities. , despite promises to save on their electricity bill.
“Ripping off New Yorkers with their hard-earned money is unacceptable,” said Attorney General James. “We hold Major Energy responsible for misleading New Yorkers and falsely promising lower prices, but in reality overcharging consumers to make a profit. Hard-working New Yorkers deserve accuracy and honesty when it comes to paying their basic bills, and my office is committed to protecting their wallets from fraudsters.
Attorney General James’ investigation found that since at least 2011 Major Energy has used deceptive marketing tactics with false promises of savings to lure consumers. Often, company sales representatives have misled consumers by falsely claiming that the representatives work for the consumer’s local utility, displaying fake badges, or wearing hard hats and construction vests when doing door-to-door solicitations. door-to-door, all to get consumers to switch their services to Major Energy. In many cases, consumers were unaware that they had been registered with Major Energy because certain sales representatives had registered them without their consent.
Records obtained by OAG show a Major Energy representative responding to a complainant saying, “I’ve worked here a long time… I’ve heard unbelievable lies, let me tell you. In another case, another Major Energy representative admitted that the company received many complaints due to “misinformation” provided by door-to-door representatives.
Major Energy serves customers in New York, Long Island, the Hudson Valley, Capital Region, Upstate and Western New York.
In his lawsuit — filed in New York County State Supreme Court — Attorney General James is seeking a permanent injunction to end Major Energy’s deceptive advertising and marketing practices, as well as restitution, reimbursement, penalties and costs.
Today’s lawsuit is part of the OAG’s long-running investigation into illegal practices by energy service companies (also known as ESCOs). Investigations into this industry have resulted in ESCOs paying millions of dollars in damages and penalties. Over the past five years, OAG has recovered approximately $4.8 million in settlements from five ESCOs.
When buying gas and electricity, consumers have two choices: (1) buy directly from a utility company or (2) contract the purchase through an ESCO. ESCOs buy energy on the open market and then resell it to consumers. Since ESCOs purchase electricity and gas from the same sources as utility companies, there is no difference in the actual electricity and gas purchased by consumers whether supplied by a ESCO or a consumer’s local utility.
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 from an ESCO.
- You do not have to choose an ESE to supply your gas or your electricity. You can choose to use your utility as your direct provider.
- Make sure you understand if an ESCO contract carries a termination fee and, if so, find out how much the fee will be and how long your contractual commitment will be.
- You have the right to terminate an ESCO contract without obligation within three days if you change your mind.
- Before accepting an offer, ask the ESCO to show you how its rates compared to your utility’s rates in each month of the past year. This can help you gauge how competitive ESCO pricing has been in the past and could be in the future.
- If you’re not comfortable with a seller’s behavior, end the conversation by asking them in writing to consider their offer so you can make a decision without pressure and after consulting with someone you trust.
- If you receive a notice that your service is being switched to an ESCO and you did not authorize the change, contact the utility and the ESCO immediately to tell them to stop the change. If you are unable to have an ESCO switch canceled, contact the New York Public Service Commission at 1-888-697-7728 or file a complaint on their website.
- If you have concerns about your interaction with or the business practices of an ESCO, contact the New York Attorney General’s Office and submit a complaint on our website.
This case is being handled by Assistant Attorneys General Joseph P. Mueller and Kate Matuschak of the Consumer Frauds and Protection Bureau under the supervision of Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia, with assistance from the data analyst Anushua Choudhury from the research and analysis department. The Research and Analytics department is led by Deputy Director Megan Thorsfeldt and Director Jonathan Werberg. The Consumer Frauds and Protection Bureau is part of the Division of Economic Justice, which is headed by Chief Deputy Attorney General Chris D’Angelo and overseen by Senior Deputy Attorney General Jennifer Levy.