NEW YORK—When deciding whether to pay higher energy bills or to buy groceries becomes a daily challenge for seniors, an offer for a lower rate looks ever more tempting, even if it’s a scam.
New York State Assemblyman Michael Gianaris and the AARP are calling on a state Senator to sponsor his Energy Consumer’s Bill of Rights.
Energy services companies (ESCOs) are third-party energy re-sellers that bundle energy services and sell them at variable rates. To gain consumers’ trust, they often create the misconception that they are suppliers acting on behalf of major electricity carriers such as ConEdison. Complaints against these companies have risen 400 percent since 2007, according to the State Consumer Protection Board.
Since energy bills are expected go up by 22 percent this summer, suppliers will most likely become more aggressive in door-to-door sales. Sales representatives typically ask to look at consumers’ electricity bills, sympathize with the high amounts they are paying, with a promise to land them better deals.
Assembly Bill A10180 proposed by Gianaris will require ESCO representatives to present identification, cap cancellation fees at $100, prohibit changes in contract length and pre-payments, identify variable charges, and allow consumers to sue for damages. The legislation also authorizes the Attorney General to seek civil penalties up to $1000 per violation.
An AARP survey found that due to rising energy costs, 12 percent of older consumers are cutting back on food, 11 percent are cutting back on medical services, and 10 percent are cutting back on their prescription drugs.
“Now you have seniors who are making very difficult decisions,” said AARP spokesperson Luci de Haan. “What are you going to do? Pay for my heat or take my medication?”
Already living on a fixed income and cutting back on daily necessities, retired seniors are the most vulnerable when fraudulent energy salespeople come knocking with empty promises, according to Haan.
Concerns for rising energy prices can devastate the more susceptible older generation particularly in this present time of economic difficulty. “ESCOs are using the same underhanded tactics that duped so many into entering subprime mortgages,” said Gianaris.
Consumers have complained about the lengthy energy contracts and indecipherable fine print. For the first few months they receive low monthly costs, which eventually balloon to higher rates than those charged by conventional energy suppliers.
Even after consumers realize they have been duped, opting out of the contract may cost thousands of dollars, a restriction not pointed out by sales representatives prior to the contract signing.
“It always has these little subdivisions, and little caveats that you don’t understand because it’s in legalese,” said Bobby Lee, a member of the AARP. “They should make it in plain English and say ‘this is a contract where you will pay x amount of dollars, if you want to leave it will cost x amount of dollars’ and this legislation is going to address this issue.”
The bill, having passed the state assembly, is awaiting the state senate’s approval and the governor’s decision.
New York State Assemblyman Michael Gianaris and the AARP are calling on a state Senator to sponsor his Energy Consumer’s Bill of Rights.
Energy services companies (ESCOs) are third-party energy re-sellers that bundle energy services and sell them at variable rates. To gain consumers’ trust, they often create the misconception that they are suppliers acting on behalf of major electricity carriers such as ConEdison. Complaints against these companies have risen 400 percent since 2007, according to the State Consumer Protection Board.
Since energy bills are expected go up by 22 percent this summer, suppliers will most likely become more aggressive in door-to-door sales. Sales representatives typically ask to look at consumers’ electricity bills, sympathize with the high amounts they are paying, with a promise to land them better deals.
Assembly Bill A10180 proposed by Gianaris will require ESCO representatives to present identification, cap cancellation fees at $100, prohibit changes in contract length and pre-payments, identify variable charges, and allow consumers to sue for damages. The legislation also authorizes the Attorney General to seek civil penalties up to $1000 per violation.
An AARP survey found that due to rising energy costs, 12 percent of older consumers are cutting back on food, 11 percent are cutting back on medical services, and 10 percent are cutting back on their prescription drugs.
“Now you have seniors who are making very difficult decisions,” said AARP spokesperson Luci de Haan. “What are you going to do? Pay for my heat or take my medication?”
Already living on a fixed income and cutting back on daily necessities, retired seniors are the most vulnerable when fraudulent energy salespeople come knocking with empty promises, according to Haan.
Concerns for rising energy prices can devastate the more susceptible older generation particularly in this present time of economic difficulty. “ESCOs are using the same underhanded tactics that duped so many into entering subprime mortgages,” said Gianaris.
Consumers have complained about the lengthy energy contracts and indecipherable fine print. For the first few months they receive low monthly costs, which eventually balloon to higher rates than those charged by conventional energy suppliers.
Even after consumers realize they have been duped, opting out of the contract may cost thousands of dollars, a restriction not pointed out by sales representatives prior to the contract signing.
“It always has these little subdivisions, and little caveats that you don’t understand because it’s in legalese,” said Bobby Lee, a member of the AARP. “They should make it in plain English and say ‘this is a contract where you will pay x amount of dollars, if you want to leave it will cost x amount of dollars’ and this legislation is going to address this issue.”
The bill, having passed the state assembly, is awaiting the state senate’s approval and the governor’s decision.
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