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NJ energy company sued for alleged 'bait and switch' tactics

Many people in New Jersey know the name Systrum Energy, an alternative energy supplier which has drawn many consumers over to their service. Just one problem: it is possible that Systrum used fraudulent tactics to lure those consumers to them.

According to a lawsuit filed by two consumers of Systrum, the company used a "bait and switch" scheme to get consumers to sign with them. Systrum allegedly told customers that they were not signing a contract with them when they actually were, and that price gouging tactics were employed once a consumer signed with Systrum. There weren't many details available, but the lawsuit does seek millions of dollars in damages -- which could involve thousands of New Jersey residents, depending on who joins the potential class action suit.

Systrum deflected blame in the alleged "scheme." With an extremely cold winter, Systrum had to raise the prices on the energy they provided because of the very nature of the "spot market" they use to purchase electricity. The market is described as "volatile" in the source article, and that market fluctuations can essentially force a provider's hand when it comes to pricing.

History does not look upon Systrum kindly, as a recent lawsuit involving an energy supplier resulted in that supplier paying $14 million after a federal lawsuit made similar claims.

Companies are not in the business of getting sued, but it is something that they have to deal with. Preparing your company to prevent potential lawsuits is one thing. But once a lawsuit is filed, the company needs to have the legal aid it requires to help it get through this difficult time.

Source: New Jersey Star-Ledger, "Lawsuit alleges NJ alternative energy provider pulled 'bait-and-switch' on consumers," Alexi Friedman, March 6, 2014

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