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Post date: April 19 2002

Energy Company Sued For Deceptive Practices

Attorney General Spitzer today announced he has filed a lawsuit against a Rockland-based energy supplier, ECONnergy Energy Company, Inc., which markets and sells electricity and natural gas to consumers across New York State.

The company is accused of switching the electric and gas service of New Yorkers without their authorization, a practice known as "slamming." It is also accused of misrepresenting the amount of the potential cost savings realized by consumers who switch to ECONnergy, having its sales agents mislead customers into believing that the agents are associated with a local utility, and violating state law governing door-to-door sales.

ECONnergy supplies electricity and natural gas to customers in the metro-New York area and upstate regions such as the Capital District, Mohawk Valley and Central New York. In seeking to develop its retail business, ECONnergy has targeted existing customers of: Consolidated Edison Company, KeySpan Energy Corporation, Niagara Mohawk Power Corporation, and Orange & Rockland Utilities, Inc.

"New Yorkers now have the opportunity to choose their energy provider, but this company's deceptive sales practices make it difficult for consumers to weigh their options in the competitive energy marketplace," Spitzer said. "Moreover, by switching consumers without their authorization, ECONnergy is depriving consumers of any choice at all."

ECONnergy, which was started in 1997, solicits customers through door-to-door sales and telemarketing. In many instances, its sales agents misrepresent their identity, either by explicitly claiming they are working for the local utility or by implying an association.

State officials have received more than 300 complaints about ECONnergy, many of which allege slamming. The vast majority of the slamming victims first discovered the unauthorized change in their energy supplier when they received an electric or gas bill that listed ECONnergy as their energy supplier.

Other victims learned that ECONnergy had slammed them when their local gas or electric company contacted them to confirm the switch. It is also alleged that contracts were fabricated and signatures were forged to reflect consumers' supposed willingness to switch energy providers.

Many consumers allege that ECONnergy's agents misrepresented the potential savings they would see if they switched to ECONnergy.

Spitzer's 18-month investigation also revealed that ECONnergy failed to provide consumers with the right to cancel the written contract, often 12 months long, within three days, as required by the New York law governing door-to-door sales.

The lawsuit, which was filed in State Supreme Court, New York County, seeks to: permanently enjoin ECONnergy from engaging in these deceptive and illegal practices; restitution for consumers who were induced through false representations to switch to ECONnergy; restitution for consumers who were switched to ECONnergy without authorization; and civil penalties and costs. The case is being handled by Assistant Attorney General Enver R. Acevedo of the Telecommunications and Energy Bureau, and Assistant Attorney General in Charge Gary S. Brown of the Westchester Regional Office.