New York Attorney General Letitia James has sued two former Rockland County energy companies for allegedly slamming customers ”” signing them up for services without their consent ”” and for other deceptive practices.
James claims that Major Energy Services and Major Energy Electric Services, now based in Houston, overcharged tens of thousands of New York electricity and gas customers by tens of millions of dollars, in a complaint filed Jan. 19 in New York County Supreme Court.
James accused Major of luring customers with false promises of savings, from 2011 to 2019, and in one instance, a sales representative allegedly coerced an 86-year-old woman with dementia to switch her service.
Major did not respond to an email request for its side of the story.
Major was based in Orangeburg until 2016, when it was acquired by Spark Energy Inc., of Houston. Spark changed its name to Via Renewables Inc. last August.
The companies are energy brokers, enabled by deregulation of energy markets in the 1990s that allows independent companies to compete against local utilities such as Con Edison.
The so-called energy service companies (ESCOs) neither produce nor deliver energy. Instead, they buy electricity and gas on the open market and have it delivered through the local utility’s wires and pipes.
Electricity and gas are the same no matter who sells it, so ESCOs compete on price.
Major initially set low fixed rates, according to the complaint. When contracts expired the plans automatically switched to a higher fixed rate or to a variable rate plan purportedly based on competitive market prices.
The attorney general claims that Major’s prices, on average, were higher than local utility prices.
“Consumers paid millions of dollars more,” the complaint states, “than they would if they had used their local utility for their gas and electric supply instead of Major Energy.”
James says Major used false and misleading advertising and employed high-pressure tactics to get utility customers to switch services.
For example, a telemarketer pretending to work for Con Edison allegedly called an elderly woman late at night and said her service would be cut off for nonpayment of bills unless she provided her account information and switched to Major.
Door-to-door solicitors posed as local utility representatives, according to the attorney general, by displaying phony badges and wearing hard hats and vests.
They gained entry to apartment buildings by waiting for someone to leave, rushing in before the door closed, and then knocking on doors. Once in, according to the complaint, they would ask to review the tenant’s utility bill and then declare that the tenant was eligible for savings.
Salespeople who gained access to account information impersonated the customers, according to the complaint, to switch their accounts to Major.
The accusations mirror charges in a class action lawsuit filed a year ago in federal court, White Plains. Angela Glikin of Maryland is seeking at least $100 million in compensation and damages on behalf of all Major customers in the United States who were charged variable rates for electricity or gas.
On Dec. 13, U.S. District Judge Vincent L. Briccetti denied Major’s request to take the dispute to arbitration and he ordered the case to be transferred to federal court in Maryland. Major has appealed the decision.
James accused Major of deceptive practices, false advertising and fraudulent conduct.
She is asking the court to order the company to stop engaging in illegal acts, pay restitution and damages to defrauded customers, disgorge all funds traceable to illegal practices, cancel illegal energy service contracts and pay civil penalties of $1,000 to $5,000 for each violation.
Assistant Attorney General Joseph P. Mueller, and Jane M. Azia and Laura J. Levine of the Bureau of Consumer Frauds and Protection, are handling the case for James.
