Why Is Albany Letting These Energy Companies Scam Thousands of New Yorkers?
The Ambit Power Trip Fall 2015, where consultants and would-be consultants for the “energy services company” drink in promises of boundless wealth. Ambit and other “ESCOs” have been the target of thousands of complaints in New York State, charged with bilking unwitting consumers. And yet...here they are.
On a summer day in 2014, Stella So was engrossed in her Korean-language soaps when she heard a knock on her door in Flushing, Queens. She answered it to find a clean-cut young man with a Con Edison badge and a clipboard. She'd been paying too much for her electricity, the man told her, and he was there to make sure she got a refund. All she had to do was sign the paperwork he held in front of her.
Still spry at seventy, Stella, who's originally from South Korea, speaks limited English. "My English, everything no, understand no," she says, recounting the story over green tea at a restaurant near her home, with translation help from her son Andrew. She's dressed in a tailored pink sweater and pearls, with a dash of pink lipstick to match, and swipes of blue eye shadow.
Maybe the man could leave whatever documents were necessary, she suggested, and she'd review them with Andrew, who often helps with her finances. But the man persisted. She could get a $300 rebate right away, he said, and lower her energy bills going forward. She just had to sign.
Living on a fixed income, Stella liked the idea of a discount, and she had no reason to doubt what the young man was telling her. He was friendly and well dressed, and after all, she'd been a Con Ed customer for years. If the company was offering cheaper energy to seniors, that wouldn't be a huge surprise.
As it turned out, the man at the door didn't represent Con Ed, but a different company, Kiwi Energy — one of more than two hundred energy services companies, better known as ESCOs, that operate in New York today. ESCOs are essentially private utilities, providing electricity and natural-gas services as an alternative to traditional utility companies.
"For the first couple of months, it was OK," Andrew says. Stella's electricity bill was more or less what it had always been. "But all of a sudden I start getting a jacked-up bill" — much higher than it should have been. Later, Andrew would use a price comparison service run by Con Ed to check the rate Stella was paying under Kiwi's plan against what she would have paid with Con Ed. By the time the contract was six months old, he discovered, her rate was nearly triple what Con Ed's would have been (an assertion corroborated by records provided to the Voice).
Andrew called Kiwi.
"I said, 'What is this?' " he remembers. "Aren't there regulations?" he asked. "Isn't any of this governed by law?"
To Andrew's surprise, Kiwi immediately offered to reduce the bill — which he found even more suspicious. What if he hadn't called? What if he hadn't been monitoring his mother's bill, and she'd had to navigate the complex contract herself? "It's obvious that they're targeting people who are out there that don't speak English," Andrew says. "Their ethics and how they work, it's just purely evil."
Stella, sitting a few feet away, chimes in: "I didn't think things like this happened in America."
Stella So at her apartment in Flushing. She says she was misled by an ESCO salesman and signed up for a service that dramatically increased her energy costs.
More than a million New York households — between 20 and 24 percent of all residential customers — get their energy through an ESCO. Since New York deregulated its energy market in 1996, ESCOs have made steady inroads, replacing traditional regulated utilities with new private energy suppliers like Kiwi.
The idea behind ESCOs was to drive down prices by introducing free-market competition to a calcified industry. The push for energy deregulation here and in other states was part of a much wider movement, one that affected everything from the financial industry to the prison system to highway construction. And while the pitfalls of deregulation in those other sectors have been well documented, the problems with New York's ESCO market have gone largely unaddressed. Only in the past few years has the scale of the industry's dysfunction begun to reveal itself. In the meantime, thousands of New Yorkers like Stella So, maybe tens of thousands or even more, have been getting systematically swindled.
Yet even as the number of reports of fraud, deceptive marketing practices, and predatory contracts has risen, the state agency designated to protect consumers from precisely this sort of deception has been astonishingly slow on the uptake. Despite highly critical assessments of ESCOs surfacing even from within its own ranks, senior officials at New York's Public Service Commission (PSC) continue to defend the industry. And things seem to be getting worse.
Organizations like the AARP have been warning their members about ESCO abuses for years. Bill Ferris, AARP's New York legislative director, says the shady practices that prevail in the business routinely ensnare elderly customers, or those with limited English skills, or both. He says it's gotten to the point where his organization discourages its members from signing up with any ESCO at all — there are just too many dishonest players out there. "They know [elderly people are] frail, and they know they may be susceptible to high- pressure sales tactics," Ferris says.
Company-specific data are hard to come by. But federal survey figures released in November showed that residential customers in New York who signed up with an ESCO paid an average of 17 percent more than they would have if they had remained with their utility. Low-income customers were being overcharged even more, says Richard Berkley, an attorney with the advocacy group PULP, the Public Utility Law Project of New York. One 2012 study involving upstate utility Niagara Mohawk found $130 million in ESCO overcharges in the region over just a two-year period.
Maisha Morales, a social worker on the Lower East Side, says she's helped extricate "hundreds" of clients from predatory ESCO contracts over the past few years. Salespeople use keywords like "discount" or "seniors," she says, to give the impression that they're offering a service. And it's not just a few bad actors: "They're all guilty," Morales says.
The nonprofit PULP agrees that abuses are rampant and that the damage usually falls on society's most vulnerable. Low-income customers are particularly susceptible to the lure of an ESCO pitch, the group says. In some neighborhoods of New York City, ESCO salespeople descend periodically, like locusts, when wholesale energy prices are low, knocking on doors and offering big savings. And far more brazen fraud is widespread, particularly a practice known as "slamming," which occurs when ESCO representatives obtain personal information for utility customers and simply sign them up for their services without their knowledge.
These reports are not merely anecdotal. More than 5,000 customers filed complaints with state regulators about such practices in 2015, and complaints have risen steadily over the past decade. The New York attorney general, in a report submitted in 2013 to the PSC — the state's primary utility regulator — complained that "widespread improper practices" are endemic to the industry. New York Mayor Bill de Blasio's administration agrees: In a 2014 letter to the PSC, the city Department of Consumer Affairs asserted that "the deregulated energy market has not been working for many consumers."
The various ESCOs deny that they mislead customers. In the case of Kiwi, the company says that it has procedures in place — such as telephone verification — to avoid exactly the scenario Stella So described to the Voice; those with limited English proficiency are supposed to have their contracts canceled immediately. Kiwi also says that employees are prohibited from suggesting they represent a local utility.
Other companies mentioned in this article maintain that cases like these are outliers and are not representative of how they do business. Even so, accounts like Stella's are not hard to come by. And if so many regulators and watchdogs agree that ESCOs are serial abusers of the public they are supposed to serve, why are they still out there? Why has the PSC, the state agency tasked with reining them in — a body chaired by Cuomo appointee Audrey Zibelman — done so little to keep them in check? Even the PSC itself, in a report released in February 2014, stated plainly that the ESCO business model "creates and too often relies on customer confusion." So why are sanctions so rarely imposed on ESCOs, and why are they almost always temporary? Why have only two active companies, out of hundreds, been permanently barred from doing business in New York?
As it turns out, in New York today, ESCOs are an officially favored industry, enjoying a regulatory climate that makes it incredibly easy to set up shop — and incredibly difficult to incur any real penalties for misbehavior. A raft of advantages under state law, originally designed to help a fledgling industry get off the ground, remain in place some twenty years later: In many cities, ESCOs enjoy built-in tax advantages that make it easier to market their products, as well as the ability to write off much of their bad debt. The PSC, meanwhile, not only has failed to cut down on abuses, but actively and aggressively — and perplexingly — promotes the growth of the residential ESCO market.
At first glance, the harm may seem minor; an extra few hundred dollars on a utility bill may not seem like a life-or-death situation. But PULP's Berkley says the consequences for consumers can be dire. Skyrocketing utility costs can trap consumers in a cycle of debt that's hard to escape. "Most people will try as hard as they can to pay their bill in a timely and responsible manner," he says. But people stuck in a predatory contract may sink deep into debt before they finally become overwhelmed, setting in motion a downward spiral. Adds Berkley, "Try to find an apartment in New York City with a bad credit score. Some people might wind up owing thousands upon thousands of dollars to an ESCO, and they end up heading toward homelessness."
The PSC has failed to protect the state's residents, according to Berkley. And something needs to change fast: "The commission has a great deal more oversight to put into place over the ESCOs to protect the public. We're not seeing that now."
In the old days, Con Ed and other local utilities operated as regulated monopolies. The rates they were permitted to charge customers were — and still are — closely circumscribed by the state. Utilities then were vertically integrated one-stop shops: They generated electricity in their own power plants and transmitted it to your home on lines that they owned and operated. But deregulation "unbundled" those two basic functions of the utility, creating a class of businesses in the middle, the ESCOs.
In practice, an ESCO does little that's tangible. They don't generate energy; that's done at independently owned generation facilities. They don't actually deliver energy to your home, either; that's still done through the wires that Con Ed and other utilities installed throughout the state over many decades (Con Ed no longer generates energy, either, having been forced to offload its power plants during deregulation). Instead, ESCOs act like commodities brokers, buying energy on the wholesale market and reselling it at a fat enough margin, in theory, to pass some savings to consumers while keeping a profit for themselves. The various ESCOs make various pitches to consumers — some offer renewable energy credits, others tout add-ons like airline miles and discount programs — but most appeal solely on price.
The ESCO system creates strange bedfellows. Because Con Ed still owns the wires but is required by the state to carry power sold by the ESCOs, the system forces "incumbent" utilities like Con Ed into an uncomfortable partnership with their competitors. That murky relationship helps enable some of the misleading tactics, experts say. The man who sold Stella So her contract — while allegedly claiming to be a Con Ed rep, and even wearing a Con Ed ID badge — was violating PSC rules by misrepresenting himself. But ESCOs routinely walk a fine line that seems intended to deceive.
"Michael," a former representative for United Sales and Promotions, a firm that does much of Kiwi's marketing in New York City, told the Voice that the subterfuge used on Stella was standard practice. (He agreed to speak on the condition that we not use his real name.) "We kind of pretend that we're associated with Con Edison," Michael says, describing an approach he claims was common among his co-workers. "Like we're their power supplier.... [Prospective customers] think that there's some kind of procedural mistake going on with their power supply and we're there to actually fix the problem." And because ESCOs exist in that strange forced partnership with incumbent utilities, he adds, "technically, we're not lying." (A representative for United Sales and Promotions vehemently denied that this was an accepted practice at the company and said that any sales representative caught deceiving a customer in that way would be fired.)
Michael lasted only a few weeks as an ESCO salesman before he realized his heart wasn't in it. While he said most of his co-workers believed the plans they were offering really were a good deal for consumers, his own "conscience" got in the way of his success. "I guess I didn't have the mentality, sales-wise, to kind of 'go for the kill,' " Michael says. "I kind of wondered, to a degree, you know, if we were actually screwing them or not. I never found out, exactly, if we were."
Of all the ESCOs operating in New York, perhaps none exemplifies the industry's problems better than Texas-based Ambit Energy. It's regarded by some independent consumer watchdogs as among the worst offenders in New York's ESCO industry, if not the very bottom of the barrel.
Ambit claims to be among the largest ESCOs in the state, with more than 300,000 customers. It has been the focus of at least two class-action lawsuits, here and in other states, alleging that the company's contracts are deliberately misleading. Ambit accounted for nearly a fifth of all ESCO complaints filed with the PSC in New York in 2015, a per-customer rate about seven times that of Con Edison.
Ambit is what's known as a network marketing company, along the lines of Amway or Herbalife, and relies on a similar business model. Its salespeople are known as "consultants," and they pay a fee for the privilege of selling Ambit services — typically a $429 buy-in, followed by monthly access fees. Ambit consultants don't earn a salary, per se. They earn money by signing up customers, but also by signing up more Ambit consultants, typically by leveraging social connections such as family and friends. The idea is to add as many consultants to your "downline" as possible. A successful Ambit rep may have dozens of others working below him or her and will earn a percentage of each utility bill paid by the customers they have collectively signed up.
That one of the state's largest ESCOs is a network marketing firm — the sort of business often criticized for walking a razor's edge between legitimate enterprise and pyramid scheme — says a great deal about how wide open New York's ESCO market is. With salespeople acting as independent agents, it's almost impossible to monitor their behavior. And since each representative is encouraged to think of him- or herself as an entrepreneur, not an employee, Ambit maintains a welcome degree of plausible deniability about their behavior.
Barbara Galasso, a photographer from Irondequoit, near Rochester, became an Ambit customer in the typical way, through social connections. Her husband teaches at a nearby college for the deaf; two of his students recruited them.
Galasso signed up for Ambit's "Guaranteed Savings Plan," which promised at least a 1 percent savings over her local utility. With her costs pegged to the utility's pricing — complete with an official-looking guarantee "signed" by Ambit's founders, Jere Thompson and Chris Chambless — it seemed she couldn't lose. It was more than two years later that Galasso finally realized her bills had more than doubled. Then tripled, according to records shared with the Voice. "I was trying to help them out," Galasso said of the students who signed them up. "But I didn't want my bill to go up three times."
Galasso signed on to one of the class-action suits against Ambit, charging that she was never notified before being rolled over into the company's far more expensive "Variable Rate" plan. In complaints submitted to the PSC, allegations against Ambit range from bait-and-switch contracts to outright slamming. "There is no way I would have signed something I do not understand," one deaf customer in East Harlem wrote to the PSC, "or without an interpreter present." Another Ambit customer declared, "I truly believe this is a scam to raise the price."
Jonathan Horwitz worked "the Ambit Opportunity," as it's called, for a little over two years before he started to see some of that same questionable behavior. "I probably made, over the two-plus years, maybe ten or fifteen thousand dollars" working in his spare time, Horwitz says. "Obviously, in my head, I was planning to be a millionaire." While it worked out fairly well for him, Horwitz says he ultimately came to believe the company was misleading customers at the bottom of the economic food chain. He'd heard rumblings about the skyrocketing contracts, but it wasn't until his own rate exploded — "it, like, doubled in one month" — that he knew something must be wrong. Questions about the company's business practices started to nag at other representatives he knew, too. One acquaintance had signed up his whole extended family with Ambit, Horwitz says, and had to scramble to cancel their accounts before all their rates shot up.
An Orthodox Jew deeply involved in his community, Horwitz considers himself a moral person, and he never wanted to mislead anybody. But he says the decentralized nature of the business meant that it was hard to tell exactly what was going on. At a regular job, he says, if your company is doing something shady, you're likely to get wind of it. "But with something like Ambit, you have no idea," he says. "You're kind of just out there selling, hoping — praying — that whoever this company is, it's doing the right thing."
Since the industry got up and running in earnest in 2000, the PSC has revoked the operating privileges of only two companies that were actively serving customers. (An unknown number of ESCOs exist solely on paper, something critics say is evidence of just how easy it is to enter New York's market — basically, file a business license and you're in. Several such shadow companies have been purged by the PSC over the years.) Only a handful of companies have suffered even temporary sanction. The state attorney general has disciplined a handful more in civil actions.
But the industry doesn't just enjoy an accommodating relationship with its regulator. A host of advantages enshrined in state law, enacted to encourage the industry's growth back when it was brand-new, have remained in force. The result is that the state is in the odd position of heavily favoring and promoting an industry it knows to be rife with abuse. For instance, if you currently have service with Con Ed or some other incumbent utility, you receive a pitch for ESCO services — included with the PSC's encouragement — right on the back of your monthly bill. An even bigger advantage is a tax exemption for energy delivery that remains in place in most of the state (New York City closed this loophole in 2010); with local tax rates of a few percent, that's an automatic, guaranteed price advantage for ESCO services. One might expect utilities to hate this kind of setup, but asked for comment on this article, Con Ed offered only an anodyne statement saying that customers are "free to shop around" for their energy supplier and should report any bad behavior to the PSC.
Another startling example of the advantages ESCOs enjoy under law is the "purchase of receivables" program, which requires utilities to buy ESCOs' bad debt — the accounts of ESCO customers who fail to pay. As William Yates, another attorney with PULP, explains, that law goes a long way toward absolving ESCOs of paying for the consequences of their marginal behavior: If an ESCO decides to blatantly overcharge or illegally "slam" customers, it can assume that eventually some of them will wise up and refuse to pay. In a normal business, that would be bad strategy, since trying to collect debt is expensive and often unsuccessful. But since the utility is compelled to take that outstanding debt off of the ESCO's books, there's basically no risk in overcharging. In fact, as long as the company overcharges by a large enough amount, it's almost guaranteed to make a profit. And by the time customers realize they've been overpaying and stop writing checks, their unpaid bills have become the utility's problem.
"The ESCO gets 99.5 percent of the face value of those receivables when they sell them to Con Edison," Yates says. "So if they're charging 100 or 200 percent more [than Con Ed would have], they're only paying a half a percent discount to unload the credit risk, and they can cash out of the situation pretty quickly."
Groups like PULP actually have an even bigger problem with ESCOs. Some bad behavior might be tolerable if the free market had worked its magic in the way true believers always intended — by lowering costs overall. But ESCOs have not lowered residential energy prices in New York. Well over a decade after deregulation, electricity costs in New York remain among the highest in the country.
Problems like this were not unforeseen. Paul Joskow, a former professor of economics at MIT and now the president of the Alfred P. Sloan Foundation, a New York–based philanthropic group, argued almost from the dawn of the deregulation movement that residential customers were unlikely to benefit from competition. Joskow argued then that technology had not yet progressed to the point where consumers could intelligently manage their energy use the way large businesses are able to realize savings through ESCO-style arbitrage. The energy industry has too many moving parts, and any savings would be minimal anyway.
Today, groups like PULP believe that the data revealed so far show what they've suspected for years: In a residential context, the whole ESCO experiment is flawed. "If 97 percent of the customers who signed up [with ESCOs] are paying higher prices, what public interest is being served by having ESCOs provide this quote-unquote service?" Yates says. "[The ESCO system] is not functioning the way it was billed to work."
In May of last year, in what might have appeared to be a new approach to the ESCO industry, the PSC finally began to investigate allegations that Ambit had been misleading customers. It was acting on a flood of complaints, the agency told me, alleging that Ambit had been enrolling people in guaranteed plans pegged to their local utility's rate, then quietly rolling them into much more expensive plans.
But if the company was worried, it certainly wasn't evident back in November, at Ambit Power Trip Fall 2015 — a convention in Albany for consultants and those thinking about entering the business. When the conference opened, at 7:30 on a Friday night, it was to the strains of Guns N' Roses' "Welcome to the Jungle," and people were literally dancing in the aisles.
Over three days, 300 or so middle-aged men and women in business-casual whooped and hollered as one speaker after another waxed rhapsodic about the incredible opportunity Ambit represents. They vied for space in one-on-one counseling sessions with the company's "top earners"; they bought stacks of promotional magazines and other Ambit gear. There were so many standing ovations I lost count.
There was precious little discussion of the product the company actually sells, however, or the terms under which it does so. Rather, the focus was on how Ambit would allow those who really gave the system their all to "become a millionaire" and amass "generational wealth" for them and their families; how the "Ambit Opportunity" would put an end to their worries about retirement and kids' college funds; how it would free them from their dead-end jobs.
But even amid three days of cheerleading, the real world intruded at inopportune moments. Near the end of the first night's presentation, for example, when Ambit's top executives, Chambless and Thompson — who had traveled from Texas for the event — took questions from the attendees, they got an earful from their own consultants, a series of whom questioned the execs about the variable rate plan that had been the source of so many complaints.
"Thousands of our customers are now coming to the end of their twelve months," one attendee said, standing at a microphone to address the executives, "and, for whatever reasons, sometimes they default into the variable rate, which usually is at least twice as much, and sometimes as much as four times as much what they pay on the guaranteed rate." When they find out, he added, they're "livid."
"My question to you is, Is there something we can do, together, as consultants and corporate, to try to restore that integrity that has been breached with those customers, that we talk about every day?" A vigorous round of applause followed, one to rival any that had been offered up throughout the weekend.
Chambless responded with some skepticism. "I don't know that any of them are four times higher," he said, adding that the company does its best to notify customers of changes to their plans.
Any soul-searching was short-lived, however. The night ended with a motivational movie clip, a scene from The Karate Kid, that was supposed to illustrate the importance of commitment. And the next day, when Carlos Marin, a motivational speaker and Ambit "top earner," took the stage, the unpleasantness had been mostly forgotten.
"Who wants to be a millionaire?" Marin shouted at the crowd, who began to cheer.
"Who's going to be a millionaire?" Marin said, and the crowd erupted.
After touting the incredible opportunity they had before them, Marin touched on the company's troubles only briefly, and only to scold any consultant in the audience who would worry about such a trifling thing.
"Twelfth largest direct sales company in the world," Marin said to the crowd, listing Ambit's accomplishments. "Seventh largest direct sales company in North America. Won all these awards. I mean, listen, people — holy moly!"
He paused, scrunched up his face, and continued in a nasal, childlike whine.
"But noooo, you wanna go, 'Oh, they raised the price two cents on my customer!' "
Then he made a thumb-sucking noise. And the crowd tittered.
As it turned out, Marin's dismissiveness about the trouble Ambit faced may have been warranted. When the PSC concluded the investigation of Ambit it announced last spring, the consequences were, essentially, nil. The PSC didn't revoke, or even suspend, the company's ability to do business in New York. There were no fines. The agency struck an officially voluntary agreement with the company under which Ambit would refund less than a million dollars in overcharges to their customers here.
Those payments are not a fine, just a return of excess profits, and since they're officially voluntary, Ambit's record remains unsullied in the state. That sum represents less than one-tenth of 1 percent of Ambit's claimed annual revenue of a billion dollars.
Ambit declined to discuss details of the agreement, but a representative told the Voice that it has always complied with New York regulations and never misled customers or failed to keep them informed about changes to their plans. But a PSC official said the company would be improving its notification process. Still, under the terms of the deal, Ambit will be free to continue to shift customers from a guaranteed-savings plan to a variable-rate plan unless they opt out. A press release from Governor Cuomo's office was triumphant, saying, "New York has no tolerance for companies who change the rules and rob ratepayers of an even playing field."
While the ongoing rulemaking at the PSC promises to tighten some regulations on ESCOs — requiring more stringent standards for applicants looking to do business in the state and releasing some historical price data for ESCO rates, among other tweaks — the latest enforcement actions don't seem like much of a departure from past practices. And as critics point out, regulations don't much matter without credible enforcement. The agency also still seems supportive of even more growth in the industry; on the last day of 2015, it opened up a new proceeding to explore further expansion of the ESCO market on Long Island.
A concerned citizen reading through the PSC's reports and then talking to its top officials could be forgiven for thinking that it is an agency at odds with itself. The PSC granted the Voice two hour-long interviews, each with a top staff member on the line. The ground rules were a bit unusual for a public agency: I was told that I was free to paraphrase our conversations, but not to quote either official directly.
Given that the PSC's explicit function is protecting New Yorkers — and that its own reports have been highly critical of the residential ESCO market — it was disorienting to listen to top officials defending the ESCO industry when asked about deceptive sales tactics, overcharges, and the failure of the market to drive down prices. For example, when asked why ESCOs charge more on average than local utilities, one official told me that they frequently offer additional value that goes beyond mere price. He used the example of ESCOs that offer airline miles as a promotional tool, or service contracts for a customer's home water heater. These services, he suggested, offer consumers a benefit independent of cost.
But the promise of airline miles didn't drive the move for deregulation. The goal was to lower prices through competition. Besides, even the PSC's own staff concluded, in that report from February 2014, that the availability of such value-added offerings was "generally very limited."
The same report went on to deliver the following scathing assessment: "In light of the apparent scarcity of energy-related value-added products and services available in the residential and small non-residential markets; the high complaint rates; and what appears to be a large number of active ESCOs generating revenues by offering consumers little more than higher prices, it is apparent that these markets are not providing sufficient competition or innovation to properly serve consumers."
Knowing of this internal assessment, it can be baffling to hear PSC officials making statements diametrically opposed to it. In an official statement emailed to the Voice, James Denn, a PSC spokesman, said the agency still supported the ESCO model, writing that the "Commission continues to encourage consumer-oriented market competition, stimulate innovation, and promote economic investment." Acknowledging that there are bad actors in the industry, Denn nonetheless defended the agency's record of what he called "swift and sure action if companies fail to meet regulatory obligations." Asked point-blank if the ESCO experiment had failed in the residential market, he answered: "No; energy retailers can provide services that consumers want and need."
The statements of PSC officials speaking on background can be even more confusing. On the topic of Ambit, for instance, one official said its policy of pegging rates to the utility was the kind of competitive pressure ESCOs were always intended to provide. Asked to elaborate, this official pointed to the company's controversial guaranteed-savings plan, which is explicitly designed to undercut the rates of the local utility (at least until it quietly rolls over to the variable-rate plan).
He was making this statement only weeks after Ambit returned nearly a million dollars in ill-gotten profits. He made it after years of complaints to the PSC about Ambit and other companies just like it from thousands of New Yorkers, many of them poor, elderly, or unable to speak English well enough to understand the contracts being placed before them. Over the course of a sometimes contentious interview, this official repeatedly returned to the idea of consumer choice — people should be free to seek things like airline miles if they want, he said — but also consumer responsibility. After all, he said, his own insurance company had recently raised his rates and he, ever vigilant, detected the change and decided to switch companies when he judged the hike unreasonable.
The implication of his tale, clearly, was that consumers should take ownership of their finances and keep an eye on their bills. Fair enough. But while that answer is to be expected from a banker or free-market purist, it doesn't much sound like one a regulator would offer in the face of rampant charges of wrongdoing.
Never mind that not everyone has quite the same wherewithal for assessing complicated financial agreements as a top-ranking official at a regulatory agency like the PSC. Be careful out there, the PSC seems to be saying. The world is a dangerous place.
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