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PUCT Adopts Prepaid Disclosure Requirements Under Final Rule
April 15, 2011
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The PUCT has adopted as final an amended version of Subst. R. 25.498 which, after October 1, 2011, will only allow prepaid service to be offered through a customer prepayment device or system, with the exception of legacy customers served on a financial prepaid product prior to October 1, 2011, who shall only be served on such financial prepaid products until the installation of an advanced meter (38675).
The Commission had previously reached consensus on nearly all aspects of the rule (see 4/7 for details), and the only matter adjudicated at yesterday's open meeting regarded the prepaid disclosure statement (PDS). The Commission adopted consensus language among REPs and consumer advocates, facilitated by Commissioner Kenneth Anderson, which establishes a tiered approach to disclosures of various prepaid fees depending on the form of marketing.
For a prepaid service advertisement conveyed through print, television, radio, outdoor advertising, prerecorded telephonic messages, bill insert, bill message, or electronic media other than internet website, if the advertisement includes a specific price or cost, the advertisement shall include in a manner that is clear and conspicuous to the intended audience:
(A) any non-recurring fees, and the total amount of those fees, that will be deducted from the connection balance to establish service
(B) the following statement, if applicable: "Utility fees may also apply and may increase the total amount that you pay.";
(C) the maximum fee per payment transaction that may be imposed by the REP; and
(D) the following statement: "You can obtain important standardized information that will allow you to compare this product with other offers. Contact (name, telephone number, and Internet address (if available) of the REP)." If the REP's phone number or website address is already included on the advertisement, the REP need not repeat the phone number or website as part of this required statement. The REP shall provide the PDS and EFL to a person who requests standardized information for the product.
For outbound telephonic solicitations initiated by the REP for prepaid service (regardless of whether a specific price is quoted), the REP shall disclose the following:
(A) the information required by bullets (A)-(C) listed above for television and similar ads
(B) when service may be disconnected, the disconnection balance, and any non-TDU disconnection fees;
(C) the means by which the REP will communicate required information; and
(D) the following statement: "You have the right to review standardized documents before you sign up for this product." The REP shall provide the PDS and EFL to a person who requests standardized information for the product.
For in-person solicitations of prepaid products (regardless of whether a specific price is quoted), in addition to the requirements of Subst. R. 25.474(e)(8), before obtaining a signature from an applicant or customer who is being enrolled in prepaid service, the REP shall provide the applicant or customer a reasonable opportunity to read the PDS.
For prepaid service marketed through an internet website, direct mail, mass e-mails, and any other media not addressed by any of the provisions listed above, in addition to meeting the requirements of Subst. R. 25.474(d)(7), the REP shall include the PDS and EFL on the internet website and in direct mail, mass e-mails, and any other applicable media. For electronic communications, the PDS and EFL may be provided through a hyperlink.
The Commission also accepted Anderson's recommendation that the required statement concerning disconnection that customers must acknowledge when enrolling on a prepaid product shall list the specific disconnection balance to which the customer will be subject.
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