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Lawsuit alleges third-party energy supplier fraud

On Behalf of | Jun 9, 2014 | Commercial Litigation |

New Jersey state agencies have initiated a civil action against three third-party suppliers of energy. The lawsuit alleges that the three energy providers falsified promises of reductions in monthly billing to hundreds of their customers. The lawsuit asks for recovery of alleged damages for consumers in addition to attorney fees, costs and civil penalties. It also demands adherence to standards of marketing, contracts and advertising that were allegedly violated.

Each company is said to have charged rates during the winter months that were far higher than the price offered by consumers’ previous energy suppliers. The alleged rates varied, with one company charging 712 percent more per therm for natural gas compared to certain customers’ previous utility supplier.

The suit further alleges that two of the three companies employed sales representatives who, among other alleged unethical sales behaviors, falsely represented themselves as employees of customers’ then-current utility providers to induce contract signings. The other company allegedly used contracts that omitted material facts, offered limited customer service and discontinued its services without notice to customers after substantially increasing their rates in early 2014.

When the state initiates a lawsuit against a New Jersey company that is drawn over an extended period of time, the overall costs can have a substantial negative impact on the company or companies involved. Such expenses can cause damage to a company that ripples through all its levels from the leadership to the many employees who could be affected by reduced hours or job loss. In order to minimize the consequences and reach a satisfactory and efficient conclusion, a business law attorney may advise that a settlement is in some cases a superior option to protracted business litigation.

Source: , “NJ Sues Third-Party Energy Suppliers For Defrauding Customers“,