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Post date: August 26 2008

Attorney General Cuomo Protects Thousands Of Westchester Homeowners From Improper Contract Renewals By Oil And Security Services Provider

WHITE PLAINS, N.Y. (August 26, 2008) – Attorney General Andrew M. Cuomo today announced his office has forced a Wantagh-based home fuel oil distribution and security services company to stop renewing contracts without providing the proper notice to its customers.

As part of an agreement with Attorney General Cuomo, Meenan Oil Company, L.P. will ensure that proper automatic renewal procedures will be followed for its customer contracts. The company, which provides home fuel oil distribution services and/or home security services to thousands of customers in the Westchester region, was alleged to have violated state consumer protection laws that prohibit the use of automatic renewal clauses in consumer contracts unless proper notification and cancellation procedures are provided.

“With home heating costs set to soar this winter, local residents must be able to shop around for the most affordable heating oil prices – they should not worry about companies automatically renewing their contracts behind their backs,” said Attorney General Andrew Cuomo. “Today’s agreement between my Office and Meenan Oil Company sends a clear message to companies across the Westchester region: follow the law and give consumers the chance to make an informed decision on whether or not to renew a contract.”

Attorney General Cuomo’s investigation revealed that Meenan Oil Co., which does business as Burke Heat and Meenan Securities, signed up thousands of area customers but failed to comply with state law in its use of renewal clauses. The Burke Heat contracts that were improperly renewed included new accounts for retail fuel delivery and service agreements for clean up of accidental oil spills and tank removals. The contracts for Meenan Securities that were improperly renewed included service agreements for equipment installation, servicing and home monitoring.

The contracts failed to state that the company must give written notification of its automatic renewal provision. The contracts also failed to inform customers of their option to terminate the contracts by written notice prior to the renewal date. Both notices are required under New York state law.

The lack of notification in the contracts could have cost consumers thousands of dollars. For example: a homeowner purchases an oil cleanup service agreement with a $500 deductible and then later sells the house to another consumer. Several years later, the new homeowner discovers a leak in the tank and contacts the company for cleanup services. The company then indicates that the agreement carries a much higher $4,000 deductible. The new homeowner was never notified about the surprising increase in cost – a significant change in the terms of the agreement.

As a result of the agreement, Meenan Oil Co. will not enforce any automatic renewal clauses unless it has provided written notice to its customers of their right to terminate the contract. The company also agreed to modify its contracts to state clearly the terms for renewal.

The Attorney General acknowledged Meenan Oil Co.’s full cooperation with the inquiry and its willingness to promptly resolve the matter.

The case was handled by Assistant Attorney General Yasmin Rahman Kutty under the supervision of Judith C. McCarthy, Assistant Attorney General in Charge of the Westchester Regional Office.