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PUC: Adherence To Disclosure Statement Can't Cure Agent Misrepresentations, Fines Retail Supplier

August 25, 2015

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

The Pennsylvania PUC issued a final order fining IDT Energy, Inc. $2,000 after concluding, in a customer complaint case, that IDT Energy charged a customer a rate in excess of the Price to Compare when its sales agent had represented to the customer that the rate would be below the PTC.

In doing so, the PUC held that a supplier's adherence to its disclosure statement in pricing cannot cure any oral or other misrepresentations made during the sales process.

"Our customer choice standards are high, specific, and unequivocal. They are intended to ensure fairness and integrity in the competitive market by requiring all marketer behavior – oral, written, or electronic – to be straightforward and clear. Only in this way may consumers make informed choices and the market flourish," the PUC said.

In the instant complaint, the customer alleged in testimony that a telemarketer for IDT represented that IDT would charge a rate that was 10% lower than PPL's rate. The rate subsequently increased above the PPL rate during certain months.

IDT opposed the relief sought by the complainant, arguing that the complaint amounted to, "a vague and contradictory recollection of an oral sales call," by someone who only complained after the weather experiences of the polar vortex in early 2014 and thirty months after enrollment. IDT also said that its bills to the complainant fully comported with its disclosure statement, and that the complaint was based on a, "nebulous and vaguely recollected 'promise' by a sales agent three years previously."

However, the PUC found the complainant's testimony regarding the sales pitch credible, while noting that IDT did not record the entire sales call (and only recorded a TPV), and elected not to present the sales agent as a witness to rebut the complainant.

"While IDT claims it is unrealistic to expect an EGS to present evidence of a specific sales call by presenting either a recording of the call, the testimony of the live agent as a witness, or both, we disagree. First, in a 2013 investigation proceeding involving, inter alia, IDT's telemarketing practices, IDT acknowledged the existence of at least some recordings of consumer contacts ... Second, in MacLuckie April 2015 I.D., the record evidence produced by the EGS in that proceeding included both the transcript of the subject sales call and the testimony of the agent involved. Finally, our 2010 Interim Guidelines, similar to our current Regulation at 52 Pa. Code § 111.5, specifically required EGSs not only to train their agents, for whose fraudulent activity the EGSs are responsible, but also to monitor telephonic marketing and sales calls for compliance," the PUC said

While IDT argued that it complied with its written disclosure statement provided to the customer, the PUC found that this was irrelevant as to whether a violation occurred during the sales pitch.

"In its Exceptions, IDT focuses more on matters that are not at issue, namely the Complainant's enrollment and the EGS' disclosure statement, than on those matters that are at issue, namely its telemarketing. IDT's contention, that there is no cause of action because it billed variable rates in full accord with its disclosure statement as fully recognized by the Complainant, permeates its advocacy," the PUC noted

The PUC stressed that, "IDT's obligations regarding enrollment and the written disclosure statement are separate and apart from its obligations regarding marketing."

"[O]ur Regulations (which we deem to include our regulatory standards then in effect under the 2010 Interim Guidelines), address not only the disclosure statement and enrollment process but also the EGS' oral marketing through the actions of its agents and representatives. ... IDT's obligation to provide consistent, accurate and adequate information extends from the earliest of sales and marketing communications to prospective customers through to IDT's billing of the agreed upon price for supply service," the PUC said

The PUC directed IDT Energy, Inc. to compute and refund to the complainant the difference between the price billed and the PPL price-to-compare in effect for the months of January and February 2014.

The PUC also imposed a civil penalty in the amount of $2,000 for violation of the Public Utility Commission's Regulation at 52 Pa. Code § 54.4(a) (requiring the rate billed to reflect the marketed rate) and the 2010 Interim Guidelines at Section H.2. (relating to disclosure).

IDT Energy provided the following statement to EnergyChoiceMatters.com: "This decision concerns an isolated customer complaint and while IDT Energy is disappointed with the decision, the company will comply with it fully."

Docket C-2014-2409676

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