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Yet Another Lawsuit Seeks Class Action Status Regarding Claims of "Competitive" Pricing from Retail Supplier

September 19, 2014

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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

A lawsuit seeking class action status has been filed against Smart One Energy, LLC, alleging that rates charged by Smart One Energy were not "competitive" as promoted in various marketing materials

The suit, filed in United States District Court for the Southern District of New York, alleged that Smart One Energy engaged in, "fraudulent and deceptive bait-and-switch sales model with their variable rate customers."

"Defendant represents to potential customers that, if they switch to Smart One from their local utilities or other energy suppliers, they will receive a low introductory rate on their energy bill, followed by competitive market-based rates and savings on their energy bills. However, these representations are a misleading and deceptive bait-and-switch scheme. Unfortunately for its customers, following the low introductory rate, Defendant's gas rates increase, causing Smart One customers' gas bills to rise substantially," the suit alleges.

"Defendant's sales pitch is false and misleading in that the rates actually charged to consumers are not competitive and bear little relation to prevailing market conditions," the suit alleged.

The suit alleges that Smart One Energy's marketing materials included the following statements:

"You want to save money and energy...we want to help you achieve that goal"

"Join the ever growing number of Customers who are saving with SMART ONE ENERGY today."

"[W]e remain committed to the core principles on which we were founded: Lowering our customers' energy bills safely and reliably."

"SMART ONE ENERGY offers competitive month to month pricing, resulting in significant savings on your Gas Supply which will vary depending on your State."

"Everything stays the same when you change to SMART ONE ENERGY, except for your increased savings."

"Competitive month to month pricing, resulting in significant savings on your Gas Supply"

"Mission to help both residential and business customers lower their energy bills"

"A reasonable consumer hearing these statements would believe that switching to Smart One would be beneficial to them and that they would enjoy unparalleled energy costs savings ... [but] consumers receive energy services that are substantially more costly," the suit alleges.

The suit alleges that Smart One's rates were as much as 35% higher than Washington Gas Light's rates in Maryland, with one plaintiff alleging they were charged the following rates ($/therm):

Month    WGL Rate   Smart One Rate
Aug-13    .4823         .6500
Sep-13    .5131         .7900
Oct-13    .5555         .7900
Nov-13    .5555         .7900
Dec-13    .5798         .7900
Jan-14    .6104         .7900
Feb-14    .6631         .9800
Mar-14    .9472         .9800
Apr-14    .8342         .9800
May-14    .7371         .9800

The suit specifically alleges Smart One's actions amount to violations of New York General Business Law §§349 and 350 (relating to False Advertising and Deceptive Acts and Practices); breach of contract; breach of covenant of good faith and fair dealing; common law fraud, including fraudulent inducement, and fraudulent concealment; negligent misrepresentation; and unjust enrichment

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