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Ambit Energy Is Cleared of Bilking New Customer on Rates

July 29, 2015 By Cheryl Kaften

A New Jersey federal judge dismissed a proposed class action suit against Ambit Energy Holdings on July 22. 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. However, the court ruled that Ambit’s practices were clearly stated in its terms of service.

According to coverage of the case (Urbino v. Ambit Energy LP et al) on the blog, Law 360, US District Judge Michael Shipp found that plaintiff Michael Urbino’s contract with Ambit “expressly allowed the company to change its rates,” stipulated it was a third-party energy provider; and superseded any previous agreements or understandings between the parties – including Urbino’s claims that he was guaranteed energy savings that were not delivered.

Of the total seven counts against Ambit, two — a state Consumer Fraud Act violation and unjust enrichment — were dismissed by Judge Shipp with prejudice; while another accusing Ambit of a breach of implied good faith and fair dealing was deferred, to be amended before August 21.

The four other counts were brought by a second plaintiff, who voluntarily dismissed himself from the case after Ambit filed its dismissal motion, so the judge did not address those counts in his findings.

“You’ve got a contract that provides for variable rates on electricity, and the contract expressly says that Ambit retains the discretion to adjust the rates, and that’s exactly what happened,” Ambit’s lawyer Steve Rasch of Thompson & Knight LLP told Law360.

In the claim of “breach of implied good faith and fair dealing” that could continue the case if it is amended by August 21, Urbino had alleged that Ambit acted in bad faith by changing customers’ energy rates after promising savings, but the judge said that Urbino had not proven the company’s intention outside of simply seeking profit. Therefore, if the claim is not amended by the deadline, it, too, will be dismissed with prejudice.

6 comments on “Ambit Energy Is Cleared of Bilking New Customer on Rates

  1. When I get a customer I usually recommend the fixed rate and inform them that in 1 yr they will get a notification to renew and the rate might be different then compared to now, I also inform them that I too am a customer

  2. Most of the complaints I hear about Ambit are based on lack of knowledge and /or a false perception of the industry and the intentions of those in it.
    It doesn’t help that some other companies’ actions help to fuel lack of trust. As a result, Ambit is lumped into the whole group of “those energy companies not to be trusted”.
    You certainly don’t become the Finest and Most Respected by treating your customers badly.

  3. It is clear that variable rates can be adjusted and the savings don’t occur all the time during the contract. However, what Ambit did was that after I canceled my contract with them, they used the 2 months until the utility drops them off the bill to hike my rates to more than 2X of what the utility would have charged. They stated in a letter sent to me before expiration of the contract that in case I wouldn’t renew, I would put onto their “variable rates plan”. However, nobody could tell me what this rate means. I assumed that it would be similar to the variable rate I had during my year as a customer now. But that wasn’t the case. After I received my last bill where they charged me 90 ct/nat .gas therm instead of the 40 ct the utility would have charged, I called them and inquired about their current “variable rate”. They told me 40ct. Then I asked them why I got charged 90ct, and they said the 40ct would only be for their current customers who are on the plan.

  4. I’m a former Ambit EC. As with most MLM companies, you only know what you are told by the company and by people high up in your upline. Learn the true statistics of network marketing. I’d also suggest asking what the term “breakage” means as by understanding this concept, you’ll understand why things are done the way they are and that’s all I’ll say about it. They’re not a BAD company, they’re just not anything special. They’re just like any other company out there trying to make money. And while there’s nothing wrong with that, they should clearly change their mantra or simply do away with it. Majority of the Ambit ‘Kool-Aid’ drinkers will vehemently defend the company and the sad part is, they’re usually the ones who are MCs or RCs and haven’t made a dime.

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