|
|
|
|
|
State Fines Retail Supplier $350,000, Cites "Hundreds" of Violations
The Maryland PSC has imposed a civil penalty of $350,000 on Starion Energy, but will not revoke Starion's license or compel Starion to return any customers to SOS.
The PSC's order addresses alleged slamming and deceptive practices by Starion, and a petition by the Southern Maryland Electric Cooperative to revoke Starion's license.
The PSC concluded that, "Starion committed more than one hundred violations involving either slamming or false and deceptive statements to customers," and, "at least hundreds of violations of the [Maryland] Door-to-Door Sales Act."
In addition to the civil penalty, Starion shall provide all customers solicited through door-to-door marketing with a written contract properly informing them of their right to cancel within 3 days.
Starion shall also notify in writing all of its SMECO customers and Pepco commercial customers, "informing them that Starion was not licensed to provide electricity service to them and that they may switch service back to their utility by notifying Starion in writing within thirty (30) days. This notice shall inform the customers that they will incur no termination fee or other charge for choosing to return to their electric distribution utility for energy service."
"The record before us supports the conclusion that Starion made an insufficient effort to monitor those representatives marketing on its behalf from November 2012 through May 2013. Starion largely attempts to explain its failure of oversight on its unexpectedly rapid expansion in Maryland such that its customer base overwhelmed the personnel dedicated to ensuring regulatory compliance. This is not the first time a third-party supplier has attempted to explain to this Commission that its failure of oversight resulted from its unexpected customer growth in Maryland. As found in earlier cases, this excuse does not mitigate the company's obligation to comply with our regulations, or preclude our imposition of penalties in this case," the PSC said.
"At the same time, we acknowledge that Starion has already taken affirmative steps – such as terminating certain representatives that engaged in misconduct, creating a compliance department, creating a 'Do Not Say' list, hiring additional personnel devoted to customer service, and hiring a general counsel to oversee compliance – intended to address the pervasive marketing shortcomings and failure of oversight which we have found were proven in this proceeding," the PSC said.
"Based upon these affirmative steps intended to significantly improve its performance going forward, we decline to impose the full level of sanctions otherwise warranted by Starion's documented misconduct. Instead, we impose a civil penalty of $350,000 and require Starion to abstain from acquiring any new customers in SMECO's service territory and any new commercial customers in Pepco's service territory. Starion may submit an application to sell electricity to the restricted classes of customers of these utilities in six months, at which time we will review whether their marketing practices have improved substantially over those forming the record before us," the PSC said.
"In a deregulated market, a customer's ability to make rational, well-informed choices among competing suppliers – and indeed the stability and growth of the supplier marketplace itself – is directly undermined by deceptive misrepresentations such as those that gave rise to this case. To be clear, this Commission cannot and will not tolerate misleading or deceptive advertising or sales tactics in the retail marketplaces over which we hold jurisdiction. We have and will continue to proactively monitor retail sales practices and act firmly when we find that violations have occurred. We welcome competition among suppliers in Maryland. In fact, to support an open marketplace, we must ensure that competition is fair and ethical, rather than misleading and obfuscating," the PSC said.
"Companies that misinform, mislead or otherwise deceive consumers undermine the benefits intended to accrue to customers as a result of fair competition, whether they do so intentionally or not. In this Order, we review the accusations against Starion, consider the compliance policies and procedures of the Company today, and define an appropriate remedy for the violations we found to have occurred," the PSC said.
Regarding specific violations, Maryland's Door-to-Door Sales Act requires, among other things, that the seller provide the customer with, "A fully completed receipt or copy of the contract at the time of its execution, which 'is in the same language as that principally used in the oral sales presentation,'" and, "A separate 'Notice of Cancellation' form containing the statutorily required language."
"Starion concedes, as it must, that its contracts do not comply with the required statutory [Door-to-Door] language," the PSC said. "Starion admits that it did not provide a written agreement with signatures to each customer. Starion admits that the 'right to cancel' language was not in bold by the signature line as required by Maryland law," the PSC said.
"The complaints received by OER and SMECO also establish a clear pattern of repeated misrepresentations by Starion representatives to potential customers, the vast majority consisting of the Starion representative falsely claiming to be affiliated with the customer's current utility, or the Starion representative improperly guaranteeing customers that switching to Starion's service would lower their monthly electric bills," the PSC said.
The PSC also concluded that, since such areas and/or customer classes were not listed on its original application and Starion did not initially apply for a license amendment, "Starion improperly has operated without a license in SMECO's service territory," and improperly served Pepco's commercial customers without a license
Starion is prohibited from enrolling any new SMECO customers or Pepco commercial customers, the PSC ruled. The Commission granted a limited license to Starion in SMECO's service territory for Starion's current customers, and in Pepco's service territory for commercial customers that choose to remain with Starion.
Case 9324
ADVERTISEMENT Search for more retail energy careers: Copyright 2010-
March 10, 2014
Email This Story
Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Manager, Channel Sales -- Retail Provider
• NEW! -- Vice President of Operations -- Retail Supplier
• NEW! -- Operations Specialist – Market Transactions -- Retail Provider -- Houston
• NEW! -- Regional Sales Manager, Texas -- Retail Supplier -- Houston
• NEW! -- Regional Sales Manager -- Retail Provider -- PA, NY, IL, Various
• NEW! -- Senior Business Analyst -- Retail Supplier
• NEW! -- National Accounts, Sales Advisor – Commercial -- Retail Supplier
• NEW! -- Energy Analyst (aka Pit Crew Member) -- DFW
• NEW! -- Sales Representative -- Retail Supplier -- Houston
• NEW! -- Energy Sales Manager -- Retail Provider
RetailEnergyJobs.com
|
|
|
|