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State authorities file fraud suits against Fairview third-party energy supplier, two others

Photo Credit: Boyd A. Loving

YOU READ IT HERE FIRST: A Fairview business was one of three third-party energy suppliers that “lured consumers with promised monthly savings that turned out to be fictional,” state authorities said today in announcing a lawsuit filed against the trio.

Keil & Sons, which did business as Systrum Energy, “promised savings of up to 20% percent on consumers’ monthly electric and/or natural gas bills” during the unusually long and cold winter, state Acting Attorney General John J. Hoffman said.

“However, instead of delivering the promised monthly savings, Systrum charged consumers far more per unit of energy than the utility companies – as much as 300% more per kilowatt-hour,” Hoffman said this morning.

“This resulted in monthly bills that were significantly higher than the consumers would have paid if they had stayed with their previous energy provider,” he said.

Advertisements by the Bergen Boulevard business also “lured consumers with the false promise of ‘no contracts,’ in violation of BPU regulations,” yet used contracts that contained “various misrepresentations and omissions of material facts,” Hoffman said.

” For example, certain Systrum contracts did not include a required statement of the residential customer’s rights or a complete list of fees, and some included the name ‘PSE&G’ even though PSE&G was not a party to the contract,” he explained. “In addition, certain Systrum contracts required consumers to waive all consumer rights under New Jersey law.

“Consumers who sought to cancel their service were often unable to reach a live Systrum customer service representative. Consumers who did reach a representative were told they could not cancel without 30 days’ notice – a requirement included in contracts that consumers had never signed or even seen,” Hoffman said.

After “drastically” increasing consumers’ energy bills this past January and February, Systrum “abruptly, and without proper notice, discontinued their services and reverted customers back to their original energy suppliers,” he said. “At the same time, Systrum deactivated its website, leaving consumers without access to information.”

As of this morning, 363 consumers had complained to the state BPU about Systrum.

A total of 55, meanwhile, complained to the state Division of Consumer Affairs, while 13 complained to the Better Business Bureau.

The other two companies named in the suit are HIKO Energy LLC (“HIKO”), of Monsey, and Palmco Power NJ, LLC & Palmco Energy NJ, LLC (collectively, “Palmco”) of Brooklyn.

The state alleges that Palmco and HIKO also engaged in “slamming” by switching customer gas and/or electric accounts without the consumers’ knowledge and consent.

“To be clear, our action relates to the specific practices of these three companies and is not an indication of wrong-doing by other third-party energy suppliers,” Hoffman said. “Deception and misrepresentation of consumers has no place in any aspect of New Jersey’s marketplace.”

Acting Director of Consumer Affairs Steve Lee added: “We hope that the filing of these actions sends a message to all potential wrongdoers that using fraud and deception to entice vulnerable consumers to switch energy suppliers will not pay.”

Chief Investigator Laurie Goodman, Investigator/Team Leader Aziza Salikhov and Investigators Jeffrey Watkins and Raquel Williams, of the Office of Consumer Protection within the Division of Consumer Affairs, conducted the investigations.

Deputy Attorney General/Section Chief Lorraine K. Rak and Deputy Attorneys General Jeffrey Koziar, Cathleen O’Donnell, of the Consumer Fraud Prosecution Section in the Division of Law, are representing the state.

* * * * * *

Consumers who believe they have been affected by practices of Palmco, HIKO, Systrum, or any other third-party energy supplier can contact the Division of Consumer Affairs at 800-242-5846 (toll-free within New Jersey) or 973-504-6200 . Those who want to file a complaint should gather all relevant documentation they may have, such as contracts, bills, and marketing or advertising materials ( NOTE: You still can file a complaint even if you don’t have any of them).

PHOTO: Boyd A. Loving

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