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NY ESCO Ceases Enrollment Under LED Lighting Program In Response To Show Cause Order, Alleges Some Complaints May Have Been Fraudulently Filed By Disgruntled Agent

October 4, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

In its initial response to a New York PSC show cause order, Marathon Energy Corporation said that it is ceasing enrollments under a program combing LED lighting with ESCO service, and alleged that certain complaints may have been fraudulently filed by a disgruntled former agent.

Prompting the show cause order, New York PSC Staff had alleged that Marathon Energy, through use of a program offered by third-party marketer Atlantis Business Consulting, LLC, was enrolling customers who had been contacted by Atlantis Business Consulting about free LED lighting. Atlantis Business Consulting, PSC Staff alleged, used an in-person meeting regarding the LED lighting to sell energy supply, and circumvent otherwise required customer protections for door-to-door sales due to the use of a pre-scheduled appointment (which Staff alleged had been represented as for the purpose of discussing only LED lighting not ESCO service) for which such consumer protections do not apply. Atlantis Business Consulting, PSC Staff alleged, would then enroll such customers with Marathon Energy or another ESCO (see prior story for more details)

Marathon noted that the majority of the individual complaints (22 of the 32) which prompted the PSC's show cause order related to, "a relatively new value-added product line offered by ABC [Atlantis Business Consulting] for the provision of LED lights in connection with enrollment into a fixed-rate electric plan with a selected ESCO (the 'ABC Lighting Program')"

"Marathon is currently reviewing and analyzing its association with the ABC Lighting Program," the company said in its initial response to the show cause order, as Marathon said that it will provide a comprehensive response for each of those complaints when it submits its subsequent response required by the show cause order under the timeline established by the order

"In the interim, Marathon has voluntarily and proactively decided to: (i) cease enrollment of any new ABC Lighting Program customers unless and until Marathon ensures such enrollments comply with all applicable requirements and the Commission deems it appropriate to enroll new ABC Lighting Program customers; and (ii) refrain from pursuing any similar LED lighting program in the future, either directly or indirectly, through a broker, unless and until Marathon ensures such programs comply with all applicable requirements," Marathon said

Given Marathon's decision to suspend the LED program which had generated most of the complaints, Marathon said that the Commission should not prohibit Marathon from enrolling any other new customers.

Marathon noted that some of the allegations in the Order revolve around whether the subject agreement was initiated through a door-to-door sale or pursuant to a "scheduled appointment at the premises of a buyer of nonresidential utility service," as Marathon said that, "Marathon anticipates addressing this issue further," in its subsequent response to the show cause order

Marathon said that the other 10 complaints identified by the show cause order, "are discrete and distinguishable from those complaints associated with the ABC Lighting Program. As such, they are not indicative of any larger compliance issues with Marathon’s enrollment practices to support the Commission prohibiting Marathon from enrolling any other new customers."

Marathon also said that it, "believes that three of the complaints cited in the Order against ABC [Atlantis Business Consulting] may have been fraudulently submitted by a disgruntled former ABC employee (QRS case numbers 616902, 622588, and 633216). In each instance, upon Marathon’s routine investigation and attempted resolution of the complaint pursuant to the OCS process, Marathon was informed that the customer was unaware of any complaint, leading Marathon to believe that these three complaints are false. For example, the customer associated with QRS complaint numbers 616902 and 633216 stated that a former ABC employee wrote a complaint letter and asked the customer to sign it. As a result of the complaint, the customer in those instances had its accounts returned to utility service, upsetting the customer who wanted to remain with Marathon. Further for QRS complaint number 622588, some of the personally identifiable information submitted by the purported customer in its complaint is not consistent with the information on file with Marathon or the local distribution utility."

"Marathon is still investigating the complaints associated with the ABC Lighting Program, but it appears that two additional complaints (QRS case numbers 612595 and 616806) may also be the result of fraudulent representations by a former ABC employee," Marathon said

Marathon described another instance where the customer's dissatisfaction resulted from another ESCO's failure to timely enroll an expiring Marathon customer

"For QRS case number 622919, the customer executed a contract with a competing ESCO that was supposed to take effect at the expiration of the customer’s agreement with Marathon. However, due to certain issues with the competing ESCO, and not through any fault of Marathon, the customer’s enrollment with the other ESCO was delayed. As a result of this delay, pursuant to the express terms of the customer’s existing agreement with Marathon, the customer rolled to a variable rate once its initial fixed-rate term with Marathon ended. This resulted in a customer complaint. After discussions with Marathon and OCS during the complaint resolution process, the customer was returned to utility service. As part of the resolution process, Marathon provided OCS with a copy of the customer’s agreement demonstrating that the contract automatically renewed to a variable rate, and OCS closed the complaint," Marathon said

Marathon also said that three complaints related to a broker it briefly used before terminating the use of such broker for what Marathon alleged was the fraudulent submission of contracts for enrollment without ever contacting or meeting with the customers, as the broker, Marathon alleged, was forging signatures on customer contracts

Upon discovering this behavior, Marathon immediately terminated its agreement with the broker, halted all enrollment of customers solicited by the broker, returned the customers to the utility, waived all early termination fees, and rerated the customers. In addition, Marathon worked closely with the Brooklyn District Attorney’s Office in obtaining prosecution against the broker for what Marathon alleged were, "its deceptive and criminal acts." Marathon said that it has been verbally informed by the prosecutor that the broker's principal pled guilty to one count of Penal Law § 170.20 (criminal possession of a forged instrument in the third degree).

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