KIYC: Offers claim you can save money by switching your utility company. But is it a good idea?
You've probably received offers claiming you can save money by switching your utility companies, but some customers who say they switched to a third-party supplier paid a lot more money instead.
In May, Mike Schwebel and his wife decided to switch their electric provider from PSEG to a third-party supplier – Pure Energy.
“They told me that if I stayed on for six months that I would get $200 back,” says Schwebel. “It sounded like a good deal. Harmless.”
But immediately, his bills started to go up from under $100 to nearly $500. While electric bills do go up in the summer, News 12 did the math and found Pure Energy was charging 2.7 times what Schwebel would have been paid had he stuck with his traditional energy company.
“When I saw 500 bucks, it obviously made me want to inquire as to how that happened,” says Schwebel.
Schwebel isn't the only unhappy customer. The Better Business Bureau gives Pure Energy a rating of F.
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“There are a lot of unanswered complaints, which for BBB, it feels like the company is kind of closing the door in a consumer's face,” says Claire Rosenzweig.
News 12 called and emailed Pure Energy repeatedly asking for a comment, but they did not respond. Experts say third party energy suppliers such as Pure Energy can offer savings, but often they cost more, sometimes a lot more, so you need to do your homework.
Research the company's complaint history with your state Department of Consumer Affairs. Check out the company's rates: on its website, Pure Energy lists costs per kilowatt hour two to three times what PSEG charges -- that's not what customers say they were told.
Also, find out if the rate is fixed or variable; variable rates can change each month, sometimes by a lot, and if a company promises you'll save money, make them put it in writing.
“Sure a company is supposed to live up to what people are telling you on the phone, but get it in writing, everything always has to be in writing.
As for Schwebel, he reached out to the Kane in Your Corner team to spread the word, so other consumers don't make the same mistake he did.
“I kind of put part of the blame on them, but ultimately it fell back on me for making that change,” says Schwebel.
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