For Immediate Release - March 01, 2012

Oil Company’s Financial Assets Frozen After Leaving Families in the Cold During Holiday Season

AG’s Office Seeks More Than $112,000 in Restitution and Civil Penalties

BOSTON – An Oxford oil company that allegedly left families in the cold through the holiday season, including a disabled widow on Christmas Day, has had its financial assets frozen through a temporary restraining order, Attorney General Martha Coakley announced today.

Filed in Worcester Superior Court on Monday, the AG’s Office complaint alleges that Kalami Fuels, Inc., doing business as Action Oil & Septic, and the company’s owner, George Papageorge, violated the state’s consumer protection laws by enticing customers to enter prepaid unfair contracts for home heating oil and then continually failing to deliver. A temporary restraining order to freeze all of Action Oil’s financial assets was approved and issued by the court. The AG’s Office is seeking more than $37,000 in restitution to victims and $75,000 in civil penalties.

“This is more than just allegedly failing to fulfill a contract that clearly took advantage of consumers, this is about an irresponsible company that put the safety of families at risk during the coldest months of the year,” AG Coakley said. “We will aggressively pursue every option available to us to make sure consumers receive restitution in some form.”

The complaint alleges that when Action did deliver to prepaid customers, it only provided enough oil for a week or two at most, often saying they were delivering small amounts to everyone so they could supply all customers. At the same time, however, Action continued to make full and prompt deliveries to customers paying cash.

In one case, a disabled widow ran out of oil on Christmas Day and was forced to spend the night at a friend’s house. Action only responded to calls for delivery after the Oxford Police became involved.

In addition to the company’s failure to honor its prepaid contracts, the complaint alleges that Action contracts contained several unfair terms including:

  • That they did not specify how or when oil was to be delivered, despite Action’s oral promises that oil would be delivered regularly as needed;
  • That the contracts stated deliveries of prepaid oil would be made between October 1, 2011 and March 1, 2012 even though the heating oil season typically runs through April;
  • That the contracts specified that any balance remaining after March 1, would not be refunded but would carry over until the next heating season beginning October 1, 2012, essentially locking customers into service with Action beyond the stated term of the contract; and
  • That the contracts contained an exclusivity clause forcing customers to not purchase oil from any other provider during the term of their contract.

This matter is being handled by Assistant Attorney General Kiernan Joliat and Chief Margaret Hurley of AG Coakley’s Central Massachusetts Regional Office, with assistance from David Monahan, Deputy Chief of AG Coakley’s Consumer Protection Division; Kristen Metzger, Investigator; and Amy Skrzek, Consumer Mediator.

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