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New York Attorney General Eliot Spitzer announced a $300,000 settlement of a lawsuit yesterday with a Rockland County-based energy supplier accused of several deceptive practices in its business of marketing and selling electricity and natural gas to residential and business customers.
ECONnergy Energy Co. Inc. in Spring Valley has about 300,000 customers in the New York metropolitan area and some upstate regions, but Spitzer's office said it is not yet known how many might be eligible for restitution.
Spitzer said ECONnergy violated state law in part by misrepresenting how much customers might save if they bought their energy from ECONnergy and by slamming, switching customers from one company to another without their authorization. Some consumers alleged that their signatures were forged on ECONnergy contracts.
"New Yorkers now have an opportunity to choose their electric providers, but with that choice can come confusion and in some cases deception," Spitzer said in a written statement. "Like other energy service companies, ECONnergy must clearly disclose the terms and conditions of its service."
Paul Larrabee, a spokesman for the attorney general, said 220 eligible customers have filed complaints so far and that 12 of them are from Westchester County and about 50 are from Rockland. Jonathan Gewirtz, an ECONnergy spokesman, said yesterday that the company does not sell energy in Putnam County.
The settlement requires ECONnergy to modify its advertising and marketing practices, clarify contract terms for customers and pay penalties, costs and restitution.
In addition, ECONnergy must comply with New York laws that give customers three days to cancel any purchases made through door-to-door sales. It must also waive outstanding balances for customers of three months or less, who were recruited through door-to-door sales.
Spitzer's investigation ran from mid-1999 to the end of 2001.
Larrabee said an estimated 10,000 former customers could be eligible for restitution if they canceled their contracts within 120 days and did not pay the balance. Victims of slamming or misrepresentation of savings could recover $75, he said, plus 15 percent of bills for the first three months.
Gewirtz said yesterday that ECONnergy decided to settle rather than continue with the expense and energy of litigation.
"There was no admission of guilt or any wrongdoing," Gewirtz said. "It made sense to put it behind us."
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