Ambit Energy Scam

Update July. 22, 2015: A New Jersey federal judge dismissed a proposed class action suit against Ambit Energy Holdings. The litigants had claimed that the Dallas-based electricity and natural gas retail energy provider had hiked up customers’ rates after luring them into switching energy providers with promises of lower prices. Judge Michael Shipp found that plaintiff Michael Urbino’s contract with Ambit “expressly allowed the company to change its rates…”.

I guess as long as you tell people you are actually going to raise their rates in the fine print of your contract everything is just fine in New Jersey.

Ambit Energy is a United States Multi-Level Marketing Company and is a residential and commercial retail energy provider. It was founded in 2006 and is based in Dallas, Texas.

Michael Urbino is a resident of West Orange, New Jersey, in Essex County. He has been a customer of Ambit Energy, L.P. since early 2012.

Michael is leading a $5,000,000 class action lawsuit against Ambit Energy.  This is not the first class action lawsuit against Ambit Energy. In my opinion, the reasons for this lawsuit are important and you will find them helpful in avoiding the Ambit Energy scam.

Here is why the lawsuit was started:

Ambit Energy has taken advantage of the deregulation of the retail electricity market in New Jersey and other states by luring consumers into switching energy suppliers based on offers of “life-changing rewards” such as “free travel, cruises and getaways” and “free energy” for convincing other unsuspecting consumers into enrolling in the Ambit Energy program and by falsely promising to charge competitive rates reflective of prevailing market conditions.

In fact, however, Ambit Energy’s pitch is in reality a false and misleading scheme, in which the rates actually charged to consumers are not competitive and bear little relation to prevailing market conditions. As a consequence of this scheme, consumers in New Jersey and across the nation are essentially being scammed out of millions of dollars in exorbitant charges for electricity. 

Ambit Energy consistently and repeatedly represent their rates as both low and competitive, and guarantee customers satisfaction, with statements on their website and in their marketing materials such as the following:

“Our residential Customers enjoy substantial savings on their energy bills, and can take advantage of our attractive Travel Rewards program.”

“[O]ur Free Energy program enables Customers to reduce, or even eliminate, their monthly energy charges by referring friends and associates to use Ambit energy service.”

“A lot of people only know Ambit by our low, competitive rates.”

“While we’re proud to give our Customers the consistent savings they deserve, those who really know Ambit understand low rates are only part of the story.”

“Exceptional Value and Life-Changing Rewards.”

These statements are misleading because consumers receive energy services that are substantially more costly, and consumers eventually learn that the “rewards” are worth far less than the “impressive savings and benefits” trumpeted by Ambit Energy.

In materials provided to its “widespread network of Independent Consultants” – who are effectively salesman paid to push Ambit Energy on unwary customers – Ambit Energy touts its “Great savings!” and “competitive rates” which noting that a consumer can expect “Satisfaction guaranteed.” Ambit Energy also uniformly and consistently markets its electricity sales in print and on the Internet by offering consumers a choice of either “Free Energy” or “Travel Rewards.” Ambit Energy entices consumers by statements that “every year, Ambit Energy gives our Customers millions of dollars through our Free Energy program.” These statements are part of the scheme and are misleading in that the rates paid by consumers are excessive in comparison to those offered by other reputable energy suppliers. No reasonable consumer who knows the truth about Ambit Energy’s exorbitant rates would choose Ambit Energy as an electricity supplier.

Here are some additional complaints that will give you some insight into how this scam works:

I signed up for Ambit Gas & Electric through a friend who is one of their consultants. The prices seemed ok at first but then during March 2014, I received a bill charging me 1.02504 per therm for Gas when PSEG was charging .294066 per therm. When inquiring about the difference I was basically told that’s what the price was at the time and there’s nothing they can do. I requested to have the service cancelled and received confirmation that both Gas and Electric would be cancelled w/in 2 billing cycles. In May I followed up about why it was still showing up on my bill and was told the Electric cancellation went through but not the Gas and had to go through the whole process over again even though they admitted it was an error on their end. Whatever $ you save initially with this company you will end up paying back and then some! Lesson learned. Do not sign up with this company, it’s a complete rip off/bait & switch. You’ll end up paying the price for it eventually! Aneta of North Brunswick, NJ on May 21, 2014.

A friend told us how good Ambit was and their prices for gas and electric were lower until recently. The bill we received today, the gas was .7685, 20 cents higher than National Grid, The electric was .16957 more than double NG. I called Ambit, they said we were on a variable rate, we were told no such thing when we signed up. How can any company be so dishonest as to steal from the elderly and disabled. My husband is elderly and disabled, my son is disabled, we live on Social Security, Ambit doesn’t care. We set our heat at 55 nights and 63 days to get thru the winter to keep bills down. I called Ambit today and told them I was going back to National Grid, I can’t stand being robbed by companies that lie to their customers. Georgia of Hudson Falls, NY on May 12, 2014.

– Source Michael Urbino Class Action Lawsuit

Ambit Energy Scam Conclusion

In my opinion, no reasonable consumer who knows the truth about Ambit Energy’s exorbitant rates would choose Ambit Energy as an electricity supplier. This is not the type of service I would like to represent and sell to my friends and family. Avoid the Ambit Energy scam.