Responding to the recent lawsuit brought by New York Attorney General Eliot Spitzer that charged Rockland, NY-based ECONnergy with slamming consumers in the state, Jonathan Gewirtz, ECONnergy’s director of business development, said that the attorney general’s claims were “baseless.” Following an 18-month investigation, Spitzer filed the lawsuit accusing the marketer of switching the electric and gas service of New Yorkers without their authorization.

Gewirtz said that Spitzer asked for a settlement over a year ago, but “we said there is nothing to settle because we did nothing wrong, and we won’t admit that we did if we didn’t. We didn’t hear anything more and we thought it was a dead issue. It’s very possible that this is post-Enron [related], trying to score some points.”

ECONnergy also is accused of misrepresenting the amount of the potential cost savings realized by consumers who switch to ECONnergy, having its sales agents mislead customers into believing that the agents are associated with a local utility, and violating state law governing door-to-door sales.

The company currently supplies electricity and natural gas to customers in the metro-New York area and upstate regions such as the Capital District, Mohawk Valley and Central New York. In an effort to develop its retail business, Spitzer said that ECONnergy targeted existing customers of: Consolidated Edison Co., KeySpan Energy Corp., Niagara Mohawk Power Corp., and Orange & Rockland Utilities Inc. In August of 2001, ECONnergy moved into the number three slot among marketers in the western New York area after just three weeks of phone and door-to-door solicitations.

“New Yorkers now have the opportunity to choose their energy provider, but this company’s deceptive sales practices make it difficult for consumers to weigh their options in the competitive energy marketplace,” Spitzer said. “Moreover, by switching consumers without their authorization, ECONnergy is depriving consumers of any choice at all.”

Formed in 1997, the marketer solicits customers through door-to-door sales and telemarketing. In many instances, Spitzer alleged that its sales agents misrepresent their identity, either by explicitly claiming they are working for the local utility or by implying an association. Spitzer added that state officials have received more than 300 complaints about ECONnergy, many of which allege slamming. He said that many of the victims first discovered the unauthorized change in their energy supplier when they received an electric or gas bill that listed ECONnergy as their energy supplier.

Gewirtz added that Spitzer’s allegations of more than 300 complaints at the New York Public Utilities Commission (PUC) were taken out of context. He said that the PUC keeps track of the number of contacts regarding a company, not the number of complaints. As for the specific complaints, Gewirtz said many of them are “several years old,” and “things we have answered twice already.” He added that the PUC has no gripes with ECONnergy and holds it as a reputable company.

The lawsuit claims that other victims learned that ECONnergy had slammed them when their local gas or electric company contacted them to confirm the marketer switch. It is also alleged that contracts were fabricated and signatures were forged to reflect consumers’ supposed willingness to switch energy providers. Many consumers allege that ECONnergy’s agents misrepresented the potential savings they would see if they switched to ECONnergy.

Gewirtz also disagrees with the claim that customers were switched without their knowledge. “Typically a person says ‘I didn’t sign up,’ and then we produce either a contract or a recorded verification and it turns out that either they did and they don’t remember, or perhaps a family member signed up and they did not communicate, or the person is just trying to get out of the contract, and they believe if they claim there is wrongdoing the company will be faster to let them out.”

Speaking on the forged contract charge, Gewirtz admitted that there were two incidents. “The salesperson who was responsible for those was terminated and the customer was told not to pay anything,” he said. “That’s not a pattern.”

Spitzer also charged that ECONnergy failed to provide consumers with the right to cancel the written contract, often 12 months long, within three days, as required by the New York law governing door-to-door sales.

The lawsuit, which was filed in State Supreme Court, New York County, seeks:

Spitzer said the case is being handled by Assistant Attorney General Enver R. Acevedo of the Telecommunications and Energy Bureau, and Assistant Attorney General in Charge Gary S. Brown of the Westchester Regional Office.

ECONnergy supplies energy to over 200,000 customers in New York, New Jersey, Maryland and Ohio.

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