Attorney General Cuomo Secures $450,000 Agreement With Suburban Propane Over Improper Tank Rental Fees
ALBANY, N.Y. (June 16, 2009) - Attorney General Andrew M. Cuomo today announced that his office has reached an agreement with the national fuel supplier Suburban Propane (NYSE: SPH) over its unexpected implementation of a tank rental fee on more than 20,000 consumers in New York state.
For many of its New York residential propane customers, Suburban Propane owns the physical tanks and is responsible for the routine maintenance, insurance, and, when necessary, replacement. Prior to 2008, Suburban Propane had not charged any sort of rental fee to a majority of its residential customers for use of these tanks. However, with little or no notice, in May 2008 Suburban Propane began charging annual tank rental fees to 22,000 propane customers in New York who were not already paying such a fee.
“Today’s settlement provides financial relief to tens of thousands of New Yorkers who were blindsided by surprise tank fees,” said Attorney General Andrew Cuomo. “Adding this unexpected fee onto customers’ bills, especially during these hard economic times, was an unfair burden that many simply cannot afford. This settlement ensures that Suburban Propane will give New York customers adequate notice before implementing these fees.”
The Attorney General’s Office found that the company’s failure to provide notice to customers before implementing the tank rental fee denied customers an opportunity to seek an alternative fuel supplier. While the imposition of a fee may be legal, doing so without reasonable notice is a violation of state law. Depending on tank size, most customers were charged an annual fee between $50 and $96.
Under the terms of the agreement with Attorney General Cuomo’s Office, by September 7, Suburban Propane will provide a credit to the account of each New York residential customer who was newly charged a propane tank rental fee between May 1, 2008 and March 31, 2009. These customers will receive a credit in an amount equal to 1/3 of the annual tank rental fee charge invoiced and actually paid by the customer. Additionally, Suburban Propane will pay a settlement amount of $35,000 to the state.
Aside from its home delivery service, Suburban Propane, headquartered at 240 Route 10 West, Whippany, N.J., has dozens of customer service centers in New York state serving more than 125,000 customers. Across the U.S., the company has more than 750,000 customers.
Consumers who believe they are being defrauded by any business are urged to contact the Attorney General’s Office at 800-771-7755. Important information for consumers can also be found online at www.ag.ny.gov. The matter was handled by Assistant Attorney General Nathan Reilly.