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Regulator Issues Show Cause Order To Retail Supplier Asking Why License Should Not Be Revoked After Staff Alleges "Significant Violations" In Sales Scripts

July 29, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The Illinois Commerce Commission has issued a show cause order to Sperian Energy Corp. demanding that the supplier show why it should not be subject to license revocation and financial penalties in light of "significant violations" alleged by ICC Staff.

A Staff report alleges potential violations including: (1) misrepresentation/deceptive sales script language; (2) non-disclosure of requisite telephone solicitation uniform disclosure statements; (3) failure to adhere to requisite minimum contract terms and conditions; and (4) training of RES agents.

Staff specifically alleges that one of Sperian's scripts, "fails to immediately advise the prospective customer that the purpose of the call is a solicitation, and to ask (at the beginning of the call) whether the prospective customer consents to the solicitation. Both omissions violate Section 412.130(a) of Part 412."

Furthermore, Staff alleges that one of the scripts, "creates a net impression that the call is not a sales call, and that the caller is not an agent of an independent seller of power and energy service. The script creates this net impression with initial statements that emphasize that the contact is 'regarding the Energy Choice Program,' that the 'reason for the call today is there was information sent out in the mail recently about the program.' Staff is not aware of any mailing sent by Sperian to prospective customers prior to the sales calls. The effect of these statements is to make prospective customers believe that the caller is following up regarding the utility’s consumer education materials. Statements in the script obfuscate the true nature of the transaction by implying it is a simple change in rate plans: 'so I can apply the lower electric rate,' and 'the only change will be that you will be paying a lower price per kWh.' These violate Sections 412.130(a) and 412.170(c) of Part 412, respectively."

Staff alleges that one of the scripts, "repeatedly uses potentially false or misleading words such as 'savings,' 'lower,' and 'low,' to mischaracterize the rate, and imply a guaranteed savings in violation of Sections 412.110(o) and 412.170(c) of Part 412."

Staff alleges that another script, "provides a net impression that the call is not a sale and the caller is not an agent of an independent seller of power and energy service by stating that the agent is calling 'about your (utility) electric account' and 'you could be receiving a rate reduction on the supply portion of your bill, this is something you’re entitled to due to deregulation, and my job is to make sure that you are aware of these savings, and to make the process easy for you.'"

Staff alleges that another script, "repeatedly characterizes the Sperian rate with potentially false or misleading words, such as 'discount,' 'lower,' and 'low,' and also repeatedly misrepresents the utility default rate by comparison as 'high' and even falsely quotes it as '9 to 19 cents right now.'"

Staff alleges that another script, "misrepresents the Sperian rate by referring to it as 'a rate reduction,' 'low,' 'best,' 'lower,' and with its fixed price offer: 'Price Protected from any rate increases.'"

"The emphasis on the market’s ability to increase rates ignores the fact that it also can, and does, decrease rates. These are violations of Sections 412.110(o) and 412.170(c) of Part 412," Staff alleges.

Staff alleges that another script states, "'I was [sic] calling you today because our records indicate that ComEd customers in the <<<>>> area may have a rate reduction available on their electric bill through Sperian Energy.'"

"A rate reduction implies there will be no change in supplier," Staff alleges.

Staff further alleges that, "Meta-data discovered by Staff in the script document indicates that someone at Sperian altered the original script on March 31, 2015, just before it was sent to Staff on April 8, 2015. The edits appear as follows in red underline and strikethrough."

Staff also alleges that the TPV script provided by Sperian fails to confirm the presence or absence of an early termination fee for Sperian’s variable rate product in violation of Section 412.110 (f) and that the customer may rescind with Sperian prior to enrollment request submission to the utility or rescind the pending enrollment within 10 calendar days after the electric utility processes the enrollment request without an early termination fee.

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