Monday, April 25, 2016

Ambit Energy is vulnerable after battling lawsuit

Ambit Energy USA is an electricity and natural gas company that strives to be “the finest and most-respected retail energy provider in America.” The company was founded in 2006 and serves energy markets that have been deregulated. While company headquarters are in Dallas, Texas, many of the 16 states (plus the District of Columbia) the company serves are in the northeast.

Despite substantial revenue, the outlook of Ambit Energy is not necessarily positive. The company has received plenty of criticism for its business practices. It has also been hit with a class-action lawsuit. Those set backs could disrupt the vast progress the company has made over the last 10 years.

Sign-up cost: $429
Global revenue: $1.5 billion
The Good: Easy service to sell; provides good support for distributors.
The bad: Customer complaints; has been hit with a class-action lawsuit.
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Ambit Energy’s sole product is supplying electricity and natural gas to its customers. In areas where it’s available, Ambit Energy also offers electricity from renewable energy sources.


Ambit Energy has been one of the fastest growing companies in the country over the past 10 years, in large part because of its network of over 250,000 distributors, or as the company calls them, Independent Consultants.

There are three ways that Ambit Energy consultants can make money:
• Jump Start Bonuses – a bonus for signing up new customers for Ambit Energy.
• Team Builder Bonuses – a bonus for putting together a team of consultants who are able to gather new customers.
• Leadership Bonuses – residual income from the bills of customers as long as they remain customers of Ambit, as well as the customers of sponsored team members.
Simply by signing up four customers within the first four weeks of joining Ambit Energy as a consultant, one can receive a $100 bonus and get started on the road to receiving residual income.

The Good

The obvious benefit for distributors of Ambit Energy is that they are selling a service that people already use. There is no need to sell people on the need for electricity; they merely have to convince them to change their provider. If there are obvious financial benefits to making the switch to Ambit Energy, it should not be difficult to get customers on board. Being able to sign up family and friends for the service creates a customer base that’s easy to access for distributors, giving them the confidence to find new contacts elsewhere.

Ambit Energy also provides plenty of support for its consultants. Each new distributor receives a Business Builder Kit, a personal website (albeit for a monthly cost), and access to a Consultant Support Group. This may be more support than what is necessary considering Ambit consultants don’t have a vast or complicated product line to sell, nor do they have to convince customers to sign up for a service they don’t already have, but the support the company provides leaves little to chance and ensures its distributors have the tools needed to succeed (1).

Ambit also does a lot for its customers, making it even easier for consultants to sell new customers on the company’s services. Customers are able to view rates, manage accounts, and make payments online, making everything easy for them. Also, as a courtesy to new customers, after signing up for Ambit, a customer will receive a voucher for a three-day/two-night stay for two people at one of 30 destinations across the country, which is a wonderful way to welcome new customers.

The Bad

Despite Ambit Energy having a high rating from the Better Business Bureau(2), the company has frequent received complaints from customers on a variety of topics. The most common complaint is with regards to unexpected costs or an increase in rates without notification. A 2014 report from ConsumerAffairs documented many complaints that not only accused the company of incrasing rates, but also claimed it difficult to contact Ambit Energy to discuss the issue.

Ambit Energy customers are typically given fixed rate contracts for one or two years before switching to a variable rate plan unless customers are proactive and renew the fixed rate contract. This change is in customer contracts, but many customers have said that the company’s consultants don’t always notify them of the changes that will come after a year or two of service. In at least four states, there have been class-action lawsuits brought against Ambit Energy for not disclosing its rates, although those lawsuits were ultimately dismissed (3).

In some states, New York in particular, Ambit Energy customers have complained that consultants embellished the financial benefits of signing up with Ambit Energy. There are also accusations that distributors purposely target consumers who are non-native English speakers, elderly, or other consumers who are considered vulnerable as a way to make it easier to sign people up for Ambit’s services.


If you live in one of the states where Ambit Energy operates, it is a potential goldmine for those interested in teaming up with a multi-level marketing firm. Getting started may be costly, but the possibility of saving on your energy bills and earning bonuses and residual income from signing up others for the company’s services is an enticing proposition.

If you have just a few family members and friends who you can sign up easily, you can quickly make back your startup money. Also, if you’re able to build a team with just a handful of other people, the income from Ambit Energy can be quite substantial, especially if you live in an area where few have the service and where few consultants are peddling the service.

However, before aligning yourself with Ambit Energy it’s imperative you take a good look into all the complaints the company has received and decide whether it’s a company you’d like to be associated with. The last thing you want to do is make money off of innocent people who have been misled and tricked by a billion-dollar company. If you feel comfortable that the widespread complaints against Ambit Energy are a thing of the past, it is a wonderful opportunity, but only if you can trust that the company will do right by its customers.


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