NYC Scams 101: Don't Get Fooled Into Switching Your ConEd Energy Service Company (ESCO)

This scam is one you may have received if you are a local here in New York City. While it may happen elsewhere around the country, predatory Energy Service Companies (ESCOs) are definitely a problem here. These ESCOs make money by having you specify to Con-Edison that you want to use their service over the other ESCOs available, thus it is advantageous for them to get as many ConEd customers to switch to them as possible. Here's how their scam works:

1. ESCOs will cold-call Con-Edison customers, using a list provided by Con-Edison with customer names, phone numbers, and service addresses.

2. The phone call is usually from somebody who sounds nice and cheery asking for you by name. This immediately adds a little credibility to their call.

3. They VERY quickly say they are from XXX XXX Energy, and that they want to talk about your ConEd account at 123 Main St (where you live, adding more credibility). Sometimes they will be more misleading and say they are from the ConEd ESCO Division or some other made-up, yet plausible sounding group.

4. They tell you that your ConEd account is "misconfigured" and that they want to help you fix a setting to ensure you are saving money each month. Of course, they don't really know what your account says because they have no access to your billing information or bills. But because they have already established some level of credibility with the target, they often get away with this.

5. If you let them, they will guide you into switching your current ESCO (probably randomly assigned when you initially setup ConEd service) to be their company instead.

There are several things illegal and immoral with this scam. First, misrepresenting themselves to be closely affiliated with, or directly part of, ConEd for the purpose of financial profit by misleading customers into specifying their ESCO over others is fraudulent corporate behavior. Second, cold-calling homes and phone that are on the National Do Not Call Registry is illegal as a violation of the FTC Telemarketing Sales Rule. Third, ignoring demands to be removed from their call list is also a violation of the FTC Telemarketing Sales Rule.

So, what can you do? First, ensure your phone number is on the National Do Not Call Registry by checking here. If it isn't, add it NOW. Next, when you get these calls, play along for a little bit while you record the name of the company calling, the name of the person calling, the phone number they called from, and the time and date of your call. Then file a complaint with the FCC on a violation of the Telemarketing Sales Rule with that information (carries a fine of up to $40k per incident), also file a complaint with ConEd against the ESCO directly, then file a report on the BBB Scam Tracker site.

I get several of these calls each week, most of them from a horrible Long Island-based ESCO named South Bay Energy. This ESCO charges $0.13 per kwh, nearly double the rate of what the more affordable ESCOs offer. South Bay Energy is not the only ESCO to try this scam, yet they are the most aggressive and scammy of them all, at least to my phone number.

Finally, you should use the NYS Power to Choose website to find the most affordable ESCOs in your service area, then contact them directly to switch your service. You still get your energy from ConEd, but they get the energy they give to you from the provider. Before I found out about this site, I was paying through the roof for the same service another Energy Service Company provided at a highly discounted rate, now my bill has dropped by about $75/month, a drastic difference.

UPDATE 02/14/2018

The owner of South Bay Energy got in touch with me today to try and get this article taken off the net. He claimed that he has no control over the marketers and agencies that were doing this. He claimed that the price on the NYS Power to Choose website showed an upper-limit number for their rates, but didn't have a response when I suggested that the other cheaper ESCOs would also have their upper-limit numbers shown. He thought I should be ashamed for filing a report and writing an article on it. His actual words were "who does that?" He tried to invalidate my complaints by saying that I should have just hung up instead of reporting anything, and I should have contacted their company first. Because yes, we all try to get in touch with some telemarketers boss when they call multiple times. Next, he tried to give me $$$ to remove the article, and got angry with me when I told him I didn't want anything from him or his company.

Finally, he tried playing the victim card, claiming that what I have done was wrong here, and that he believes "what goes around, comes around". I sincerely hope that if I ever have a predatory marketer or scammer working to trick people into using my business that you, or somebody else would report it. I would hope that if those people violated the FCC's Do-Not-Call registry and Telemarketing Sales Call rules, I would be reported. I would take a long hard look at the techniques I use to generate business, and alter them accordingly.