DID YOU GET CAUGHT IN THIS ENERGY SAVING PYRAMID SCHEME?

THEY'RE WORTH ABOUT $20 BUT THEY WERE SOLD TO CONSUMERS FOR $200 TO $300 EACH!

Texas Attorney General Greg Abbott obtained a temporary restraining order and limited asset freeze Monday against Forum Trading, Inc. The state’s legal enforcement action charges the Texas-based company, which is organized as a multi-level marketing scheme with independent distributors, with marketing energy devices it falsely claims will significantly reduce power consumption, extend the life of household appliances and save consumers money.

“With Texas families focused on energy prices and seeking cost savings, these defendants are promising lower electricity bills but failing to deliver,” Attorney General Abbott said. “Experts who reviewed the defendants’ products discovered no actual savings for well-intentioned purchasers. The Office of the Attorney General will continue to aggressively crack down on scam artists who attempt to illegally profit from Texas families.”

Court documents filed by the state indicate that Forum Trading, Inc. and several affiliated companies, including Xium Corporation and Xedia Technologies Inc., deceptively market and sell small devices that can store electric energy. The defendants falsely claim that the “Xpower Energy Saver,” which they sell for almost $200 per unit, will reduce consumers’ electricity consumption by up to 25 percent, while the “Mega Power Saver,” priced at nearly $300, will result in more than 10 percent savings.

However, engineers who tested the purported energy-saving products at the University of Texas at Austin concluded that the Xpower Energy Saver could produce no more than a 0.06 percent reduction in electric consumption in an average house. The Attorney General’s laboratory expert similarly concluded that the Mega Power Saver could provide, at best, no more than one percent total energy savings. According to the state’s expert, the devices have no effect on the life of household appliances, despite the defendants’ claims that the Xpower Energy Saver allows appliance motors to “run about 10% cooler.”

The laboratory testing also revealed that the products are, in reality, ordinary capacitors, which are often used in electronic circuits to store energy or to differentiate between high-frequency and low-frequency signals. Capacitors are regularly used by electricians, and they can be purchased for less than $20.