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Post date: April 6 2001

Florida Energy Supplier To Provide Consumers With Restitution And Pay $200,000 To Settle Charges

Attorney General Spitzer today announced a settlement with a Florida-based energy supplier, Total Gas & Electric, Inc. (TG&E), that will significantly change the way the company does business in New York state. The settlement requires the company to: provide restitution to consumers; modify its advertising and marketing practices; pay $200,000 in penalties and costs; and clarify contract terms for customers.

The settlement also requires TG&E to comply with New York's three-day right to cancel law for door-to-door sales and provide a refund in an amount equal to 18% of the total cost of services provided. The restitution plan covers current and former TG&E customers as of January 1, 1998. Refunds to customers depend on the length of the contract and could be as high as $200.

TG&E supplies electricity and natural gas on a contract basis to approximately 28,000 customers in the New York City metropolitan area. The electricity and/or natural gas is delivered to TG&E's customers by a regulated utility such as KeySpan, Con Edison or Orange & Rockland. In addition to paying TG&E for the electricity and/or natural gas, the customer also pays the local utility for the transmission and delivery of the electricity and/or natural gas.

"New Yorkers now have an opportunity to choose their electric providers, but with that choice can come confusion," Spitzer said. "Like other energy service companies, TG&E must clearly disclose the terms and conditions of its service in language that consumers can easily understand so that they can fully weigh their options in the competitive energy marketplace. My office will continue to vigilantly monitor companies' advertising and marketing practices so that consumers can make sound decisions free from high pressure sales tactics."

The investigation by Spitzer's office found that TG&E's sales representatives engaged in the practice of "slamming" electric and natural gas customers, by forging customer signatures on contracts and, in some cases, switching consumers to TG&E's service without a signed contract authorizing the switch. Spitzer's office also found that TG&E's door-to-door sales representatives used deceptive marketing materials that misrepresented to customers their potential savings if they switched to TG&E and sales representatives made false and misleading statements to customers regarding their identity.

Spitzer's investigation also found that TG&E's written contracts failed to provide to consumers with the right to cancel within three days as is required by the New York law governing door-to-door sales.

Over the past three years, the Attorney General's office has reviewed approximately 120 consumer complaints received by the Attorney General, the New York State Public Service Commission and the Better Business Bureau about TG&E's door-to-door sales practices.

To participate in the restitution program, current and former customers should contact the New York State Attorney General's office by calling 1-800-771-7755 or by writing to: Attorney General Spitzer, Attn.: Total Gas & Electric Settlement, 120 Broadway, New York, NY, 10271. The deadline to file claims for restitution is September 30, 2001.

The case was handled by Assistant Attorneys General Jill Ellen Sandford and Enver R. Acevedo of the Telecommunications and Energy Bureau, under the direction of Bureau Chief Mary Ellen Burns.