Too Good To Be True? NJ Energy Company Pays $5.28M to End Consumer Fraud Lawsuit
A third-party energy supplier that advertises that it "treats you like family" has settled with the state over allegations it failed to produce promised lower energy rates for its customers.
Palmco Energy agreed to pay $5.28 million, including $4.5 million in customer restitution, for violating the Electric Discount and Energy Competition Act, the Consumer Fraud Act, and multiple regulations concerning energy licensing and registration, retail choice consumer protection, anti-slamming requirements and advertising.
“Palmco portrayed itself as an affordable alternative for New Jersey consumers looking to lower their energy bills, but failed to deliver on its promises,” Acting Attorney General Christopher S. Porrino said. “Through this settlement, Palmco has agreed to significant revisions in its marketing and sales practices that are intended to ensure that consumers are provided with accurate disclosures as to pricing and not misled.”
In a statement, Palmco said it "made a strategic decision to settle this claim, despite our position on it, so that we may move forward and continue to focus our efforts on delivering quality products and services to our customers throughout New Jersey as well as the other states where we operate.
"We will continue to adhere to all regulations, and stand by our customers’ legal right to choose their supplier for natural gas and electricity.”
The company violated its contracts with customers, officials said. Instead, during the severe winter of 2013-14, customers bills were much higher than if they had stayed with their original energy supplier.
As part of the settlement, Palmco will open an office in the state where customers can speak with a live customer service representative to access records and handle complaints. The company will also revise its sales material, sales practices and website and retrain its staff. A full time compliance officer will also be hired to make sure the terms of the agreement are followed.