For Immediate Release - March 15, 2012

Action Oil Ordered to Refund Pre-Paid Customers

AG’s Office Seeks More Than $75,000 In Restitution As Well As Civil Penalties From Oil Company That Left Consumers In The Cold

BOSTON – An Oxford oil company that allegedly left families in the cold through the holiday season, including a disabled widow on Christmas Day, was ordered to refund consumers who prepaid for service at the start of the winter season, Attorney General Martha Coakley announced today.

Issued by a Worcester Superior Court judge yesterday afternoon, the preliminary injunction prohibits Kalami Fuels, Inc., doing business as Action Oil & Septic (Action Oil), and its owner, George Papageorge, from destroying any records pertinent to business operations. It also requires Action Oil to issue refunds to all prepaid customers for any oil they did not receive. The injunction will remain in place throughout the AG’s lawsuit which is seeking more than $75,000 in restitution to victims as well as civil penalties.

“We are very pleased that the court has taken this important step to ensure restitution for some consumers but we are still aggressively pursuing our lawsuit to make certain all affected customers receive compensation,” AG Coakley said. “The safety and well-being of several families were put at risk by Action Oil and we are determined to not let them get away with their irresponsible business practices.”

The AG’s complaint, filed in Worcester Superior Court on February 28, alleges that Action Oil and Mr. Papageorge violated the state’s consumer protection laws by enticing customers to enter prepaid unfair contracts for home heating oil and then repeatedly failing to deliver. On February 28th, the AG’s Office sought and the court approved a temporary restraining order freezing all of Action Oil’s financial assets.  Yesterday’s preliminary injunction further orders Action Oil to refund consumers who prepaid for service at the start of the winter season.

The complaint further alleges that when Action Oil did deliver to prepaid customers, it only provided enough oil for a week or two at most, often saying it was delivering small amounts to everyone so it could supply all customers. At the same time, however, Action Oil 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 Oil 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 Oil contracts contained several unfair terms including:

  • That they did not specify how or when oil was to be delivered, despite Action Oil’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; and
  • 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 Oil beyond the stated term of the 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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