Cuomo settlement changes colors

By Nick Rees | Nov 10, 2009


BUFFALO, N.Y. (Legal Newsline) - A western New York gas provider alleged to have used deceptive tactics has agreed with state Attorney General Andrew M. Cuomo to amend a 2008 settlement to change how it does business.

New York Energy Savings Corporation, doing business as Energy Savings, has agreed to both change the company's name and the color scheme of its uniforms so that consumers will not think the company is affiliated with the local regulated utility.

"Representatives of this company went door to door, and were often mistaken for employees of the local utility," Cuomo said.

"Consumers ended up signing contracts under that false belief, and that's when the complaints started. To make an informed choice for an energy provider, homeowners must have all facts. This agreement will make sure this company changes its methods so homeowners know what they are signing up for."

The agreement with Cuomo also implements a $50 cancellation fee cap for consumers who cancel contracts after 30 days. Before the agreement, the company was found to be charging some consumers more than $600 in cancellation fees.

Cuomo's office had reached a settlement with U.S. Energy Savings in 2008 that required the company to waive hundreds of thousands of dollars in residential consumers termination fees. The company was also required under that settlement to pay $200,000 in costs and penalties to the state.

The 2008 settlement implemented a series of comprehensive reforms meant to ensure that customers would receive accurate, up-front information from the company's sales staff about their service agreements.

Following additional complaints from consumers that indicated the company's name and dark blue color scheme misled homeowners into believe the company was affiliated with the local regulated utility, Cuomo's office amended the 2008 agreement to require that the name U.S. Energy no longer be used and uniform colors be change to green to avoid confusion.

The original settlement required the energy service company to allow consumers the right to cancel their agreements without termination fees any time from the date their agreement is signed until up to 30 days after the date of the first natural gas bill where U.S. Energy Savings is listed as the gas supplier.

Energy service companies began competing with regulated utilities in 1996 in the sale of natural gas directly to consumers in the state of New York. These companies, though, are not regulated like utilities and are often the subject of consumer complaints.

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