New York Attorney General Letitia James took action to protect consumers, securing more than $555,000 from an energy service company that was engaging in prohibited marketing practices over a two-month period. Columbia Utilities, LLC and Columbia Utilities Power, LLC (Columbia Utilities) entered into hundreds of gas and electric contracts through prohibited door-to-door marketing to convince consumers across the state to use its services.
A previous settlement with Columbia Utilities and the Office of the Attorney General (OAG) prohibited the company from conducting door-to-door marketing.
Columbia Utilities has paid $500,000 in penalties for violating the previous settlement and is paying nearly $60,000 in full restitution to the impacted consumers.
“Protecting consumers from unscrupulous companies is a top priority for my office,” said Attorney General James. “This hefty penalty forces Columbia Utilities to pay the price for its wrongdoing and ensures that it will follow the rules. Consumers can trust that my office will protect them from companies that break the rules. Companies that violate settlements with our office are on notice that such conduct will not be tolerated.”
Columbia Utilities is a repeat offender. In 2011, an investigation by OAG found that the energy service company was misleading consumers. As a result, the company agreed to pay $2 million in restitution to consumers deceived by false promises of savings.
The agreement also imposed restrictions on the company’s marketing practices. In 2014, the agreement was amended to impose a further restriction, entirely prohibiting Columbia Utilities from engaging in door-to-door marketing without prior approval from OAG.
Nevertheless, in November 2020, the company violated the terms of the settlement and resumed door-to-door marketing for two months, before OAG learned of the conduct and promptly shut it down.
During that time, Columbia Utilities convinced 912 consumers throughout the state to sign 1,334 contracts. The prohibited door-to-door marketing was predominately in and around New York City, Albany, Syracuse, Rochester, Ithaca, Utica, and Watertown.
To resolve the violation of Columbia Utilities’ prior settlement, the company has paid $500,000 in penalties plus full restitution under each of the prohibited contracts for every dollar that consumers paid above what they would have paid to their utilities.
Columbia Utilities is providing the restitution to affected consumers without requiring any further action by the consumers.
In addition, each contract with Columbia Utilities will be terminated, unless the consumer affirmatively opts to continue the contract with the company.
Further, the prohibition against door-to-door marketing by Columbia Utilities will persist, unless the company presents a suitable marketing plan that is approved by OAG.
The settlement with Columbia Utilities is part of OAG’s long-standing, ongoing investigations into energy service companies (ESCOs) and their practices.
As a result of those investigations, ESCOs have paid millions of dollars in restitution and penalties.
Together with OAG’s recent settlement with Family Energy, over the last five years OAG has recovered more than $7.5 million in settlements from six ESCOs.
The Columbia Utilities investigation was handled by Assistant Attorney General Jason L. Meizlish of the Bureau of Consumer Frauds and Protection, under the supervision of Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia, with assistance from Data Analyst Anushua Choudhury in the Research and Analytics Department.
The Research and Analytics Department is led by Deputy Director Megan Thorsfeldt and Director Jonathan Werberg.
The Consumer Frauds and Protection Bureau is part of the Division of Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.