Class Action Accuses Ambit Energy of False Energy Prices

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On Dec. 1, Ambit Energy Holdings LLC was hit with an amended deceptive marketing class action lawsuit, alleging the company made a regular practice of convincing consumers to switch their energy providers by falsely promising lower gas and electric bills only to charge said customers higher prices for energy sources.

Plaintiffs Michael Urbino and Brian Whitney, residents of New Jersey and New York respectively, have filed this amended Ambit Energy class action lawsuit claiming the energy company took advantage of consumers in their home states and other states across the nation.

According to the deceptive marketing class action lawsuit:

“Like the risky adjustable-rate mortgages that contributed to the financial crisis, Ambit’s variable energy rates can fluctuate rapidly and have no ceiling. Yet Ambit conceals this financial risk with an extensive marketing campaign that bombards consumers with promises of consistency and savings while failing to warn consumers of the factors affecting Ambit’s variable energy rates and that those factors can drastically turn.”

In this way, Ambit shifts the risk and responsibility of the gas and electric market completely onto the consumer who is then burdened by the exorbitant prices for these home utility sources, the class action lawsuit alleges.

The Ambit Energy deceptive marketing class action lawsuit was originally filed in August by Urbino who alleged that in 2012 he switched his energy provider from local New Jersey utility company PSE&G to Ambit based on Ambit’s deceptive marketing campaign promising him and other consumers a savings on energy bills. However, according to Urbino, his Ambit energy bill was 60 percent higher than his monthly utility bills through PSE&G.

Urbino’s Ambit Energy class action lawsuit was later amended and resubmitted earlier this week to include plaintiff Whitney, who alleges he also switched his gas and energy provider to Ambit in January 2011 based on the allegedly false marketing scheme that promised Whitney a lower bill price. According to Whitney, when he received his Ambit utility, it was $500 higher than the bills he received from his previous energy provider.

Jointly, Whitney and Urbino are representing themselves in this Ambit Energy deceptive marketing class action lawsuit, as well as a Class that will potentially include Ambit Energy consumers in 14 different states across the United States. The plaintiffs bring several allegations against Ambit Energy, including claims of violations of New Jersey Consumer Fraud Act, violations of the New York Business Law, breach of covenant of good faith and fair dealing, and a claim of unjust enrichment.

Ambit Energy is not the first third-party energy provider to face a deceptive marketing class action lawsuit.

Earlier this year, Palmco Energy NJ LLC, Hiko Energy LLC, and Systrum Energy were all named defendants in a class action lawsuit alleging these companies promised lower energy prices to consumers who switched from their current energy providers and, much like the claims against Ambit, allegedly billed consumers for higher prices than originally marketed. This deceptive marketing class action lawsuit was not brought against the companies by consumers, but rather by the New Jersey attorney general’s office.

The plaintiffs are represented by Jonathan Minkove and Lawrence J. Friscia of Friscia & Associates LLC; Charles J. LaDuca, Michael J. Flannery and Beatrice Yakubu of Cuneo Gilber & LaDuca LLP; Seth R. Lesser and Fran L. Rudich of Klafter Olsen & Lesser LLP; and Steven L. Wittels and J. Burkett McInturff of Wittels Law PC.

The Ambit Energy Deceptive Marketing Class Action Lawsuit is Michael Urbino and Brian Whitney, et al., v. Ambit Energy Holdings LLC, et al., Case No. 3:14-cv-05184, in the U.S. District Court for the District of New Jersey.