Wittels McInturff Palikovic has filed a class action on behalf of thousands of New York customers who were charged exorbitant electricity and gas rates after switching from their local utility to XOOM Energy.
Traditionally, residential gas and electricity were supplied by regulated utilities like Con Edison and the rates that these utilities could charge were strictly controlled. However, in the 1990s, Enron’s unprecedented lobbying campaign resulted in the deregulation of state energy markets such that consumers were permitted to choose from a variety of companies selling residential energy. Seizing on deregulation, independent energy service companies (“ESCOs”) like XOOM Energy entered the energy market.
XOOM Energy started its business in 2011 and now sells energy in 19 states and Washington, D.C. In achieving its expansion, XOOM Energy developed and deployed underhanded business practices that resulted in its energy customers paying far more than they would have paid had they remained with their local utilities.
XOOM Energy entices residential customers to sign up for its service by offering its energy at low initial “teaser rates.” After the teaser rates expire, XOOM’s energy rates are supposed to be based on XOOM’s actual and estimated supply costs in accordance with XOOM’s customer contracts. However, the rates that XOOM actually charged customers have been excessive and are entirely unrelated to XOOM’s supply costs. The markup over XOOM’s supply costs has been dramatic and has varied greatly each month. XOOM’s rates have often risen even as its supply costs fall.
Only through class action litigation can customers remedy XOOM’s wrongdoing. Because the monetary damages owed to each customer are small compared to the much higher cost that customers would incur in trying to challenge XOOM’s unlawful practices on an individual basis, it does not make financial sense for an individual customer to bring her own lawsuit. Further, many customers don’t even realize that they are victims of XOOM Energy’s deceptive conduct. With this proposed class action, Wittels McInturff Palikovic seeks to level the playing field and make sure that companies like XOOM and other ESCOs engage in fair and upright business practices.
For more information, or to join this case, contact us.