This week we wrote about New York’s residential energy services companies, known as ESCOs, an industry that many consumer watchdogs say is rife with abuses. The state’s main utility regulator, the Public Service Commission, has so far been slow to remove bad actors from the market — and continues to help the industry gain a stronger foothold in the state. Follow the story link below for an in-depth look at all things ESCO, and check out the video and audio recordings to see how ESCO marketers operate in the real world.
Texas-based Ambit Energy claims to be one of the largest ESCOs in New York. The company has been accused by consumer watchdogs of misleading customers with contracts that dramatically increase their rates after one year unless they opt out.
ESCO Representatives Bully Brooklyn Apartment Residents from Voice Media Group on Vimeo.
A former Kiwi Energy customer told the Voice that she was misled by high-pressure sales tactics, and Robert Kendall, an attorney in Brooklyn, filmed his encounter with salespeople supposedly working on behalf of that company. Kendall shot the video (above) of ESCO representatives who claimed to work for Kiwi in his building in Bushwick. He said they frequented the building, badgering residents and often behaving aggressively, as seen in the clip. The video depicts another barely honest sales pitch: when the representatives suggest that buying energy from a “local provider” will ensure local rates. That claim is not borne out by the facts. Kiwi told the Voice that tactics like this are not condoned or encouraged by the company.
United Sales and Promotions
A former employee of United Sales and Promotions, a marketing company that recruits customers for ESCOs like Kiwi, told the Voice that he and his co-workers routinely misled customers, deliberately making a sales pitch designed to blur the line between that company and local utilities.
A Voice reporter encountered the aggressive marketing approach of a Direct Energy salesman firsthand when the latter knocked on the former’s apartment door in Upper Manhattan in 2013. In this audio exchange (above), the sales tactics of another ESCO, Direct Energy, follow much the same pattern as that used by Kiwi. The representative, who was dressed in a vaguely official-looking blue windbreaker, presents himself ambiguously as a “supplier for Con Ed” and claims to be “following up on a notification that’s sent here every thirty days that has not been responded to.” This is technically accurate but highly misleading. Because Con Ed includes a general notice on its bills about the availability of ESCO services, there is indeed a “notification” sent every thirty days with every Con Ed bill; if you aren’t signed up with an ESCO, technically that notice has “not been responded to.” But the pitch actually seems designed to make the target believe he or she is in some kind of trouble. The recording illustrates the subtle tactics some ESCOs employ to gain customers without being fully honest. Direct Energy told the Voice, in part, that this particular representative has since left the company and that “Direct Energy takes all matters related to misleading sales practices very seriously.”