KIYC: Alternative energy suppliers exposed

Customers say they were promised they would save money if they switched power companies, then were charged two, three, even six times the rate they used to pay. (6/4/14)

TRENTON - Customers say they were promised they would save money if they switched power companies, then were charged two, three, even six times the rate they used to pay. Now the New Jersey attorney general has filed suit against three third-party energy companies, including one that was the subject of a previous Kane In Your Corner report.

"We are charging each of these third-party energy suppliers with engaging in false and deceptive marketing practices," New Jersey Attorney General John Jay Hoffman says.

Hoffman says Palmco, HIKO and Systrum Energy engaged in deceptive tactics, including falsely guaranteeing customers they would save money. In fact, all are variable-rate providers that buy energy at market prices and pass the cost on to consumers. They are frequently cheaper than standard utility companies but can sometimes be much more expensive, as they were when energy costs spiked over the winter. Both HIKO and Systrum charged more than double the price customers would have paid their regular utility companies, Hoffman says, while Palmco charged a whopping 649 percent more. Palmco and HIKO are also accused of slamming, switching people to their service without consent.

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Kane In Your Corner reported on customer complaints with Systrum Energy back in February. At the time, the company blamed its rate increases on the price of energy in the spot market, and denied promising customers that it would always be cheaper.

The New Jersey Division of Consumer Affairs cautions consumers not to allow energy companies to use high-pressure tactics to rush them into switching providers. In addition, you can find out if a company is licensed, and how many complaints it received, by contacting either the Division of Consumer Affairs or the Board of Public Utilities.

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