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Retail Supplier to Pay $75,000 Under Settlement to Resolve Alleged Slamming
Energy Services Providers, Inc. d/b/a Pennsylvania Gas & Electric and U. S. Gas & Electric, Inc. d/b/a Pennsylvania Gas & Electric would pay $75,000 to resolve a Pennsylvania PUC Staff investigation into the alleged slamming of 10 customers with over 300 accounts, due to what USG&E said was an individual subverting USG&E's internal controls.
Specifically, PUC Investigation and Enforcement (I&E) Staff, "found that multiple accounts of ten commercial customers in the Philadelphia area had been switched to PaG&E without legitimate authorization."
"These customers include several banks, two stores that sell auto parts, a pet store, a tax preparation store, a medical diagnostic testing place and a school district. With the exception of the school district, all customers operate businesses at numerous locations in Philadelphia. In all, a total of 191 locations were affected among the ten customers," a settlement between Staff and USG&E notes.
"I&E found that PaG&E initiated the process of switching 319 electric and/or natural gas accounts without legitimate authorization from the customers. Of the 319 accounts where PaG&E initiated the process of switching to its supply service, 108 accounts received supply service from PaG&E" Staff said.
Specifically, the investigation revealed that a telephone sales representative (TSR) employed by a vendor utilized by PaG&E, "was apparently involved in a scheme to obtain third-party verifications by directing the verifications to an accomplice who posed as the customer, thereby enrolling the accounts. Thus, while audio recordings of TPVs were made, the 'authorizing' party on the other end was not the customer."
The settlement notes that, "the TSR did not make calls to the customers that resulted in sales transactions. The TSR skipped the transaction process and proceeded straight to the third-party verification service, with an accomplice who acted as the customer on the telephone line."
PaG&E has several controls to ensure compliance, including: (1) A TSR cannot use a landline to conduct marketing and is only permitted to use company dialer calls; (2) A TSR must make sales calls to the telephone number presented to them and the calls must be recorded; (3) The telephone numbers are those of potential customers who are on an Eligible Customer List (ECL), which is obtained from the utility; (4) A TPV provider verifies every enrollment that results from a sales call and all TSRs must use the services of the TPV provider contracted by PaG&E; and (5) Quality Assurance Analysts select random call recordings of each TSR to ensure that the TSR is complying with procedures.
The settlement notes that the, "TSR willfully circumvented PaG&E's procedures by directly calling the TPV provider from an unrecorded landline and using an acquaintance to pose as the customer."
Immediately after PaG&E learned of this incident, PaG&E implemented an additional procedure consisting of a courtesy call to customers enrolling more than five accounts.
With respect to the customers who received supply service without authorization, PaG&E mailed refund checks to customers who experienced any difference between PaG&E's rate and the public utility's rate for the month or more of service they had with PaG&E.
PaG&E did not send commission payments to the vendor for sales conducted by this particular TSR. In addition, PaG&E refuses to retain the services of any vendor who employs this particular TSR, and the vendor terminated the TSR's employment.
To resolve the alleged authorized switches, PaG&E will pay, under a settlement with PUC Staff, a civil penalty in the amount of $75,000 to resolve all allegations of slamming and to fully and finally settle all possible liability and claims of alleged violations of the Public Utility Code and Commission regulations arising from the incident.
Additionally, PaG&E will provide to each of the customers, who had one or more of the 108 accounts physically switched to PaG&E, a refund for the entire electric generation or natural gas supply portion of their bill for the period of time they were served by PaG&E (not just for amounts above the utility price).
U.S. Gas & Electric provided the following statement to Matters:
"PAG&E received customer complaints concerning alleged nonconsensual switching to its energy program. PAG&E conducted an internal investigation which resulted in actions taken against a single employee working for a single vendor who was acting in a manner contrary to company policy and training. Upon discovery, the individual was not only terminated, but permanently embargoed from working for U.S. Gas & Electric and its affiliates. PAG&E cooperated fully with the I&E to resolve the situation in a timely manner."
"At PAG&E, we take compliance very seriously," stated Doug Marcille, Director, President and CEO of U.S. Gas & Electric. "PAG&E puts forth a tremendous effort including sales call audits, third party verifications, and quality assurance, to ensure that no customer is switched without his or her consent. We deeply regret that this event happened, as it provided a negative experience for the customers involved and blemished PAG&E's spotless record. As a result, we have instituted additional policies and procedures in an effort to eliminate such occurrences from happening in the future," Marcille said.
"Customers affected by the alleged switch were returned back to their utility company and will be provided a refund by PAG&E where applicable. The company's position and role in the events that transpired provided fair and reasonable settlement of the issues raised by the I&E. PAG&E is currently in the process of requesting approval of the settlement by the Pennsylvania Public Utility Commission," the company said.
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November 21, 2013
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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