Hiko Energy To Pay $2.1 Million Settlement, Customer Refunds Expected
By Jim Donovan: HIKO Energy, LLC has agreed to pay $2.1 million, including $1.85 million in restitution to consumers, in order to resolve a complaint filed by the Acting Attorney General, New Jersey Board of Public Utilities (BPU), and New Jersey Division of Consumer Affairs.
The State's Complaint alleged that HIKO, a third-party energy supplier based in Monsey, New York, misled New Jersey consumers with written guarantees that, if they switched from their utility companies, they would see monthly savings of as much as 10 percent in their electric and/or natural gas bills during the first six months. HIKO sales representatives also allegedly represented to consumers that, after the first six months, their monthly bills would never exceed those of the utility companies.
However, HIKO did not deliver the promised savings. As energy prices spiked in early 2014, HIKO's rates far exceeded those its customers would have paid, had they stayed with their previous electric and/or natural gas utilities.
The State also alleged that HIKO switched some consumers' electric and/or natural gas accounts without the consumers' knowledge or consent, an illegal practice known as "slamming."
HIKO has made the first of three settlement payments and must provide the entire $2.1 million by June 1, 2015. The State will distribute the $1.85 million designated for consumer restitution in late summer, with the help of a Settlement Administrator designated under the terms of the settlement. The settlement amount also includes $150,000 to reimburse the State's investigative costs and fees, including the cost of distributing settlement funds, and $100,000 in civil penalties.
Additionally, under the settlement, HIKO agreed to make significant revisions to its business practices. These include revising the company's website, contracts and related documents to provide, among other things, clear information about the company's pricing and billing practices, including the precise formula by which monthly gas and electric prices will be determined. The website will include a clear and conspicuous chart of the final unit prices that HIKO charged to consumers during the previous six months, as well as comparison rates charged by the utility companies.
HIKO also will ensure that its consumers are provided with all of the material terms and conditions in a single, clearly legible document. HIKO will further ensure that the HIKO website and contracts will not include contradictory or inconsistent information. The State's Complaint alleged that consumers were at times presented with various documents that contained contradictory information about HIKO's terms and conditions.
The company will revise its sales practices by re-training its sales representatives, whether company employees or third-party vendors, maintaining recordings of sales calls for three years, and taking disciplinary action against any sales representatives who subject consumers to deceptive or misleading sales practices. The company also will either stop offering guarantees and/or making representations of price savings, or will ensure that it actually provides the savings guaranteed and/or represented to consumers.
Moreover, among other terms of the settlement, HIKO will revise its customer service practices by establishing an office in New Jersey at which consumers can speak with customer service representatives and access their consumer records. The company also will ensure its customer service staffing is adequate to let consumers immediately contact a live person during normal business hours by phone, email, or office visit. The company shall undertake to respond to consumers' voicemails and letters within 24 hours.
Consumers who believe they have been affected by unconscionable commercial practices of a third-party energy supplier are urged to contact the Division of Consumer Affairs at 800-242-5846 (toll-free within New Jersey) or 973-504-6200. Consumers who wish to file a complaint are reminded to provide all relevant documentation they may have, such as contracts, bills, and marketing or advertising materials, along with their complaint.
