Energy deregulation in states across the country has allowed consumers
to buy energy from an electricity supply company of their choice. The
purpose behind deregulation is to provide consumers choice and allow competition
to drive down energy rates. Now, local public utility companies like PECO
and PPL are no longer the only option for energy supply, instead customers
can purchase electricity from private energy supply companies. While these
private electricity companies supply the power, the delivery of electricity
remains the job of the local public utilities.
Many private electricity supply companies promise customers competitive,
market-based rates and savings on their energy bills if they switch from
their local utilities to the new supply company. However, these representations
are a bait-and-switch trap. Within one or two billing cycles, many supply
companies routinely increase their rates well above the market - sometimes
by as much as 150% or more. A customer may even end up paying two to three
times more for electricity than what he or she paid before converting.
Instead of benefitting from switching to the new supply company, a typical
customer loses out - to the tune of hundreds or even thousands of dollars per year.
Electric companies throughout Pennsylvania, New Jersey, and across the
United States are facing consumer class action lawsuits for these excessive
rate spikes. Many electricity companies use a combination of false advertising,
misleading promises, and slamming to lure customers into switching to
The consumer class action attorneys at of Golomb & Honik, P.C. have
litigated and settled one class action and are currently investigating
consumer claims that their electricity rates spiked unfairly. If your
electricity bills increased excessively after being promised a fair and
competitive rate, call us at
(215) 278-4449 immediately to evaluate your case.
Electricity Companies and Misleading and Deceptive Promises of Savings
When a company makes a promise to their consumers, they must make good
on that promise. Failure to do so is a form of deceptive marketing and
is against a number of consumer protection laws. If electric companies
are following the terms that they provided to their customers, there is
not a problem. If they are price gouging or making promises that they
are not keeping, then this is against the law and consumers have a right
to seek compensation.
The New De-Regulated Energy Market
The way these new companies work is that they buy power in the wholesale
market from many of the same companies that were broken apart in the 1990s.
They then sell this electricity to consumers just like traditional public
utility companies. Unlike traditional utilities, however, retail utilities
can raise electric rates at will. They use aggressive telemarketing, door-to-door
visits, and promises that lure customers to switch to their company. Sadly,
these savings never materialize and consumers are left holding the bill.
Electric Companies and Dubious Marketing Tactics
Price Gouging: When there is a state of emergency, such as during the Polar Vortex, electric
companies and other types of businesses are not allowed to engage in price
gouging. If electric companies throughout Pennsylvania were engaging in
this type of fraudulent and deceptive behavior, they will face serious
penalties and consequences.
Slamming: Many electric companies are under investigation for engaging in a fraudulent
and deceptive marketing tactic known as slamming. This involves switching
a customer to a new utility without authorization.
Excessive Fees: Some electric companies have resorted to using excessive fees that are
hidden in fine print. Costs to reconnect, disconnect, move service, paying
your bill by phone are examples of fees that can quickly add up without
a consumer’s knowledge.
Shady and Dubious Contract Language: Using contracts that are difficult to decipher is just one of the ways
electric companies trick consumers into paying more for power. Purposefully
trying to conceal fines, fees, or other billing procedures is against
Electric Companies and Consumer Class Action Lawsuits
Recently, the Attorney General and Acting Consumer Advocate filed a joint
complaint against several of these alternative power suppliers throughout
Pennsylvania for using misleading and deceptive promises of savings, slamming,
lack of good faith in handling complaints, failing to provide accurate
pricing information, and prices nonconforming to disclosure statements.
The electric companies under investigation and named in the complaint are:
- Pennsylvania Gas & Electric
- Blue Pilot Energy
- Respond Power
- IDT Energy Inc.
- HIKO Energy
During the winter of 2014, Pennsylvania consumers saw their electricity
bills double and even triple, even when they did not use any extra energy.
This went against the claims made by these companies to stay competitive
with their current rates and even offer lower savings. Electric companies
in Maryland, New York, and New Jersey have faced similar problems. Maryland’s
public service commission fined energy companies there after they ran
false ads promising savings and distributed misleading flyers to consumers.
Consumer Protection Lawyers
If your electricity rates have increased suddenly after switching to a
different service provider, you may have cause to file a claim. The lawyers
at Golomb & Honik, P.C. are actively investigating consumer claims
of rate spikes by deceptive and fraudulent electric companies throughout
the country. For a free review of your case, call the
Pennsylvania consumer protection lawyers at Golomb & Honik, P.C. today at (215) 278-4449 or fill out our confidential
consumer protection lawyers
at Golomb & Honik, P.C. have successfully represented individuals in
Philadelphia, Pennsylvania, New Jersey, and throughout the United States.