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Energy Plus Faces Class Action over Rate Hikes

Newark, NJ: A consumer fraud class action lawsuit has been filed against Energy Plus Holdings LLC and Energy Plus Natural Gas LP (Energy Plus) for perpetrating an illegal bait-and-switch scheme that has deceived and defrauded thousands of New Jersey consumers of millions of dollars.

"Energy Plus promises customers competitive market-based rates and savings on their energy bills if they switch their accounts from other energy suppliers," said Mr. Wittels of Sanford Wittels & Heisler LLP, the lawfirm representing the plaintiffs. "In fact, any savings that occur are short-lived and effectively wiped out within one or two billing cycles as Energy Plus jacks up its promised rate, often by as much as 150%. Customers can end up paying two or three times more for electricity or natural gas than they did before switching their accounts to Energy Plus. Instead of getting the promised benefit, these customers incur a tremendous loss, to the tune of hundreds or thousands of dollars every year. Such business practices are not only illegal, they are unconscionable."

The lawsuit was filed on behalf of Kearny, NJ resident Yue Yu and a class consisting of thousands of New Jersey residents and businesses whom the Pennsylvania-based company deceives in New Jersey. Mr. Wittels added that Energy Plus is believed to engage in the same tactics in the other states where the company does business, including Connecticut, Illinois, Maryland, Massachusetts, New York, Ohio, Pennsylvania, and Texas.

Ms. Yu was enticed by Energy Plus' deceptive claims to switch her electricity and natural gas service to the company in September. Between November and April, she incurred more than $200 in overcharges for her energy supplies, billed at a rate about 70% above the market rates over the 6-month period. When she discovered the magnitude of the difference between the rates promised by Energy Plus and the rates she was actually billed, Ms. Yu switched her service back to PSE&G.

According to the complaint, Energy Plus takes advantage of the deregulation of energy in New Jersey by adopting fraudulent and deceptive business tactics. "The company misleads customers to believe that by switching to Energy Plus they will save money compared to receiving energy services from their local public utilities," said co-lead counsel Jeremy Heisler. "The company also represents that its rates are tied to market factors and are competitive, when in fact, they are not. It's a classic consumer fraud and scam."

The complaint asserts that Energy Plus' rates are "completely divorced from prevailing market conditions" and usually "skyrocket" within 60 days of customers' switching their accounts.

Ms. Yu says these corporations exploit customers by making ambiguous representations and agreements that create an expectation of savings that never materialize. "The company never discloses that its regular rates are nearly always substantially higher than its competitors and exorbitant when compared to the energy supply market," said co-counsel Grant Morris .

The complaint describes in detail how Ms. Yu and all members of the class suffered economic injury because they routinely paid substantially more for Energy Plus services compared to the cost of energy from their previous supplies.

The proposed class has two subclasses. The first subclass comprises New Jersey customers of Energy Plus Holdings LLC who switched to the company for electricity services; the second comprises New Jersey customers who used Energy Plus Natural Gas LP as their natural gas supplier. Ms. Yu's claims are typical of the claims of the class.

The complaint alleges that both Energy Plus companies violated the New Jersey Consumer Fraud Act, breached the covenant of good faith and fair dealing integral to all contractual agreements, and received unjust enrichment by taking money that belongs to Ms. Yu and the class members.

The complaint asks for a class action declaration; an award of compensatory damages to Ms. Yue and class members; treble damages, as allowable under state law; an order enjoining Energy Plus from continuing to implement its deceptive, illegal and unlawful trade practices and schemes; pre- and post-judgment interest on damages awarded.

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Published on May-2-12

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Posted by
Bruce Copeland
Since I am a Maryland resident, I presume this class action suit is not available to me. Is there a similar class action suit being initiated in Maryland?

Posted by
john skocylas
We have had energy plus for 4 yrs. The last two bills were huge compared to neighbors. I canceled, went back to nat. a quote for their rates, unbelieveable difference! I contacted the public service commision for help. They are investigating and energy plus got "shuck up" when psc contacted them. First were offered $75.00 for a courtesy credit, then another for over $ 500. The difference we calculated were almost $3000,00!!! We e-mailed energy plus with this info. Hopefully we will be compensated.

Posted by
I was approached by someone at the airport promising me airline miles to sign on. I told him I would look into it. I signed the papers agreeing to check it out when It came in the mail. I got the papers and decided I didn't want to switch.

My wife takes care of the bill so I never noticed the switch until now. The first 3 months were .06 and change. As soon as the 3 months were up it jumped to .149. PPl was at .09.

This company is garbage and I hope those in charge go to jail. I wonder how many seniors had to go cold in the winter because their electric bill was so high and they didn't realize they were scammed. I really hope they get what's coming to them

Posted by
d Baginski
I have been with energy plus for the last 3 years and my winter electric bills have gone over 1200.00 per month!!!

Posted by
matt swanson
My rate is almost $.18 (double PECO's price to compare). I made the mistake to talk to the rep at the boarding gate promoting Energy Plus - so do the airlines bare any responsibility? do they know who is promoting their airline miles at their gate and the impact on their customer base?

How can they continue to operate this way after a class action settlement? I feel so angry and sorry for the people that are getting overcharged.

Posted by
Switched to Energy Plus after receiving a letter with a promotional 25,000 miles for United Airlines for signing up with Energy Plus back in August. My energy bills were around $50-75 on average. This month I received a bill for over $350!! Where are my miles? And more important, why has my electric bill skyrocketed?

Posted by
I am a current Energy Plus victim in PA. Our bill has doubled since they somehow switched us (can't even remember how or when this occurred).

Posted by
I was told by Energy Plus representatives that not only would my bills be lower but I would also receive a $1,000 refund after the first year of service. When my service with Energy Plus started, my bills were a little higher but I didn't pay much attention to it. My last two billing cycles amounted to more than $1,600 in charges and over $700 in charges for this current billing cycle. I spoke with my utility company and realized that I was being charged more than twice as much as the market rate. I feel like I was lied to and like the Energy Plus salesperson misled me into signing up for the service.

Posted by
My mother-in-law signed up with Energy Plus because of an attractive upfront promotion. She was told her electric prices would never be more than what the utility charges. She just received a bill that is 227.66% higher than Atlantic City Electric's current rate - over 200% more !!! She was billed at $.22470216 when ACE's price is $.0987. This is not just fraud, this is larceny!


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