Attorney General James Sues Energy Service Company for Overcharging and Misleading Consumers

Major Energy Overcharged New Yorkers Despite Promising Savings,
and Switched Consumers’ Energy Service Providers 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 false advertisements. An investigation by the Office of the Attorney General (OAG) found that consumers throughout the state paid tens of millions of dollars more for Major Energy’s services than they would have paid to their local utilities, despite promises that they would save on their electric bill.

“Scamming New Yorkers out of their hard-earned money is unacceptable,” said Attorney General James. “We are holding Major Energy accountable for misleading New Yorkers and falsely promising lower prices, but actually overcharging consumers to make a profit. Hardworking 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 revealed that since at least 2011, Major Energy used deceptive marketing tactics with false promises of savings to lure consumers. Often the company’s sales representatives misled consumers by falsely claiming the representatives worked for the consumer’s local utility, displaying phony badges, or wearing construction hard hats and vests during door-to-door solicitations, all to get consumers to change their services to Major Energy. In many instances, consumers did not realize they had been enrolled with Major Energy because some sales representatives enrolled them without their consent.

Records obtained by OAG show a Major Energy representative responding to a complainant saying, “I’ve worked here for a long time…I’ve heard some amazing lies, let me tell you.” In a separate instance, another Major Energy representative admitted the company receives a lot of complaints because of “misinformation” provided by the door-to-door representatives.

Major Energy serves customers in New York City, Long Island, the Hudson Valley, the Capital Region, the North Country, and Western New York.

Through her lawsuit — filed in New York County State Supreme Court — Attorney General James is seeking a permanent injunction to stop Major Energy’s misleading advertising and marketing practices, as well as restitution, disgorgement, penalties, and costs.

Today’s lawsuit is part of OAG’s long-standing, ongoing investigation of illegal practices by energy service companies (also known as ESCOs). Investigations into this industry have resulted in ESCOs paying millions of dollars in restitution and penalties. Over the last five years, OAG has recovered approximately $4.8 million in settlements from five ESCOs.

When purchasing gas and electricity, consumers have two choices: (1) buy directly from a utility company or (2) contract the purchase through an ESCO. ESCOs purchase energy on the open market and then resell it to consumers. Because ESCOs buy the electricity and gas from the same sources as the utility companies, there is no difference in the actual electricity and gas that is purchased by consumers, regardless of whether it is supplied by an 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 an ESCO.
• You do not have to choose an ESCO to supply your gas or electricity. You may choose to use your utility as your direct supplier.
• Make sure you understand whether an ESCO contract involves a termination fee and, if so, find out the fee amount and the length of your contractual commitment.
• You have the right to cancel an ESCO contract with no obligation within three days if you change your mind.
• Before accepting any offer, ask the ESCO to show you how its rates have compared with your utility’s rates during each month in the past year. This can help you judge how competitive the ESCO’s rates have been in the past and might be in the future.
• If you are uncomfortable with how a salesperson behaves, end the conversation with a request to look over their offer in writing so that you can make a decision free of any 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 switch, contact the utility and the ESCO immediately to tell them to halt the switch. If you are unable to get an ESCO switch cancelled, contact the New York Public Service Commission at 1-888-697-7728 or file a complaint on their website.
• If you have any 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 Data Analyst Anushua Choudhury of the Research and Analytics 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 led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.