Attorney General Cuomo Announces Nationwide Investigation Into Debt Settlement Industry

ALBANY, N.Y. (May 8, 2009) -Attorney General Andrew M. Cuomo today announced that his office has reached settlements with six New York-based home heating oil companies serving the Hudson Valley, Catskills, Southern Tier and North Country for various violations over the past year, including improperly adding surcharges for credit card payments and failing to provide required notifications to consumers.

The agreements with Paraco Gas Corporation, Depew Oil Company, Inc., Vaincourt Fuels, Wilson Oil, Kuno Oil and Russo Fuel end various deceptive practices and provide refunds to more than 500 consumers who were wrongfully charged, as well as penalties and costs to the state.

“Home heating costs account for a substantial portion of most hard-working New Yorkers household budgets, and any illegitimate or surprise costs added to the bill are unacceptable,” said Attorney General Cuomo. “It is particularly disturbing when companies take advantage of consumers purchasing such a basic and needed service. I continue to urge all consumers to thoroughly review contracts before signing and to alert my office if they believe they are being subjected to misleading or deceptive acts.”

Rye Brook-based Paraco Gas Corporation services approximately 65,000 customers and has offices in the Hudson Valley, Catskills and Southern Tier. The Attorney General’s Office found that Paraco sent deceptive contracts that may have led consumers to believe they were signing up for fuel delivery for the 2008-2009 heating season only. However, the contracts constituted a 7-year commitment. The company also failed to notify customers in advance over automatic contract renewals.

The Attorney General’s agreement requires Paraco to reform its practices and contract language and pay $12,000 in penalties and costs to the state. The agreement also prohibits Paraco from penalizing customers who did not receive adequate notification of contract renewal and wish to cancel service.

Attorney General Cuomo’s Office also found that Newburgh-based DePew Oil Company, Inc. improperly charged a 2 percent service charge on credit card payments. State law prohibits a surcharge on the use of a credit card for purchases. After intervention by the Attorney General’s Office, DePew stopped the practice and paid $6,970.47 in refunds.

Vaincourt Fuels, based in Malone, sells home heating oil, kerosene and related services in the North Country. Vaincourt entered into a settlement with the Attorney General’s Office requiring the company to immediately stop engaging in deceptive debt collection practices and pay $5,000 in penalties and costs to the state. In an attempt to collect on overdue payments, the Attorney General’s Office found that the company sent collection letters that included:

  • A statement that gives the appearance that Vaincourt had an established relationship with a local court and that a judgment in its favor would be automatic. For instance: “We will take you to Westville Town Court. This will cost you approximately $100-$200 more than what you owe. The Judge will award the judgment to Vaincourt Fuels.”
  • Improperly suggesting that Vaincourt has a relationship with the customer’s employer and has successfully garnished wages through them before. For instance: “It has been effective for us in the past to have wages garnished through your current employer.”

The Attorney General’s Office also determined that three other home heating fuel companies were also illegally charging surcharges for credit card payments:

  • Wilson Oil, located in Beacon, wrongfully charged 41 customers surcharges for oil deliveries paid for with credit cards. After the Attorney General’s involvement, the company refunded the charges, totaling $678.30.
  • Kuno Oil, based in Canton, improperly charged surcharges to 26 customers, totaling $496.26. Upon the Attorney General’s intervention, the company agreed to refund the charges to customers.
  • Russo Fuel, Inc, located in Highland, wrongfully charged surcharges to six customers for fuel deliveries. Once the Attorney General contacted the company, Russo refunded a total of $163.10 to the customers who were charged.

The three companies have all agreed to no longer charge surcharges for credit card payments.

Consumers who believe they have been subjected to fraud or deceptive practices are urged to contact the Attorney General’s Office at 800-771-7755. Contact information for local regional offices can be found online at