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ESCO To Pay $550,000 Under Settlement With New York Attorney General

April 12, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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New York State Attorney General Eric T. Schneiderman announced a $550,000 settlement with Liberty Power Holdings, LLC ("Liberty"), which the AG said originated from, "part of an ongoing investigation into energy service companies (ESCOs)."

The AG's office alleged in a news release that, "The investigation uncovered that the company’s contractors and subcontractors lured consumers with false promises of savings, and then charged them costly early termination fees when they tried to get out of their contracts. Additionally, sales representatives used other deceptive means to enroll consumers, such as falsely claiming to represent the consumers’ current utility provider or having someone who was unauthorized to give consent such as a minor sign the enrollment agreement. As a result, many consumers did not even realize that they had been enrolled in Liberty."

A Liberty Power Spokesperson provided the following statement concerning the settlement: "At Liberty Power we make quality personal and strive to continuously improve everything we do. We take our sales quality programs very seriously and have made many investments over the years to develop a best-in-class program. Liberty Power, who has served electricity to New Yorkers for over 15 years, remains committed to serving New York customers while being in full compliance with our agreement with the State. We look forward to providing customers value-added products and services, as well as an exceptional customer experience for years to come."

The AG's office said in a news release that, "According to the settlement, Liberty will implement new restrictions on their marketing practices to prevent future frauds and pay $550,000, which will be used to refund eligible consumers."

"Today’s settlement returns more than half a million dollars to consumers who were deceived by Liberty, which falsely promised savings and enrolled consumers without their consent," alleged Attorney General Schneiderman. "My office will not tolerate exploitative businesses that prey on unsuspecting New Yorkers and their hard-earned cash."

The AG's office alleged in a news release that, "Beginning in 2012, Liberty conducted door-to-door sales and telemarketing to New York residential customers primarily serviced by Con Edison, in the New York City and Westchester area. Additional impacted customers were served by Niagara Mohawk Power, Central Hudson Gas & Electric, Orange & Rockland Utilities, Rochester Gas & Electric, and New York State Electric & Gas Corp."

The AG's office alleged in a news release that, "The Attorney General’s investigation found that between 2012 and early 2013, these sales representatives, hired by Liberty’s contractors and subcontractors engaged in multiple deceptive business practices, including falsely promising consumers that they would save money by switching to Liberty, falsely claiming to represent the consumers’ current utilities, switching consumers’ electricity providers without their consent, and violating the Do Not Call Registry. When consumers tried to cancel Liberty’s contracts, they were often charged Early Termination Fees of $200 or more. The investigation found that Liberty failed to effectively monitor and supervise the activities of these sales representatives to ensure that their conduct was lawful and not deceptive."

The AG's office alleged in a news release that, "In 2013, the Public Service Commission ('PSC') suspended the company’s authorization to conduct door-to-door marketing in New York, the first time the PSC had ever taken such enforcement action with a New York ESCO. Although Liberty subsequently revised its marketing program, as recently as 2017 the PSC continued to receive complaints about the company’s sales practices."

The AG's office alleged in a news release that, "Liberty used its status as an ESCO to charge its customers higher prices than they would have paid if they purchased energy from their utilities."

The AG's office said in a news release that, "Today’s settlement requires Liberty to pay $550,000 to be used for consumer refunds. The settlement also requires Liberty to take measures to prevent deceptive practices in the future, including adequate training of customer service representatives, recording communications between customers and sales representatives that result in a sale, refraining from misleading marketing and advertising that implies savings, regularly monitoring customer service calls, and implementing appropriate disciplinary procedures for violations of the law."

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