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State Adopts Double Verification (LOA and TPV) For All In-Person Sales

"All In-Person Interactions" Now Regulated

Will Apply Same Customer Protections To MLM Sales As Required For Door-to-Door Sales

Will Require Background Checks on All MLM Agents Conducting In-Person Sales

June 2, 2017

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Copyright 2010-17
Reporting by Paul Ring •

The Illinois ICC has issued a second notice order to adopt a host of new retail electric marketing rules, including new rules that would subject all in-person sales, including multi-level marketing sales, and sales conducted outside the customer's home (such as at kiosks), to the same requirements which were previously limited to door-to-door sales.

The second notice order will be submitted to the Secretary of State to begin the second notice period.

The adopted second notice order defines "in-person solicitation" as, "any sale initiated or conducted when the RES [retail electric supplier] agent is physically present with the customer.

Under the second notice order, all in-person solicitations that lead to an enrollment will require a Letter of Agency and a third-party verification.

"[T]he Commission sees a benefit to regulating all in-person interactions and disagrees with ICEA, CES, NEMA and RESA that interactions where the customer approaches the RES are fundamentally different than interactions where the RES agent approaches the customer. The Commission disagrees with arguments that mall kiosks and other types of consumer-initiated and publicly-conducted solicitations are not as susceptible to high pressure sales tactics as door-to-door sales because of the consumer’s ability to readily extricate themselves from the discussion, the consumer’s decision to initiate the contact, and the public nature of the venues," the ICC said in the second notice order (emphasis added)

"The Commission seeks to regulate all forms of in-person solicitation to ensure that the customer understands what he or she is purchasing, hence the requirement for a LOA and TPV," the ICC said

The ICC further explained, concerning whether "dinner table" or "casual" discussions about shopping retail energy supply are now regulated under the second notice order: "ICEA requests a clarification that in-person does not cover sales where an enrollment does not occur, either by adding a scope description to this Section or adding an Applicability description. The Commission has been very clear that 'dinner table' discussions or conversations between friends and family about RES offers that cannot result in an enrollment simply are not applicable to this Section. The Commission does not find that including what seems to be a fairly obvious distinction between an in-person solicitation and any casual discussion about RES offers that cannot result in an enrollment, adds anything to this Section of the Proposed Rule. Additionally, the language proposed by CES and others which 'clarifies' that Section 412.120 does not cover 'communications where an enrollment does not occur' goes too far. Many communications which do not ultimately result in an enrollment should be covered by this Section of the Proposed Rule."

While common and (generally) non-controversial for door-to-door sales, notable provisions that now apply to other in-person sales (namely MLM) include the requirement that sales agents wear an ID listing the RES agent's full name in reasonable size font, an agent ID number, and a photograph of the RES agent, and the trade name and logo of the RES the agent is representing

Again, while common for door-to-door, the in-person rules under the second notice order now applicable to MLM provide that in the absence of local ordinances or regulations, RESs and their agents shall not conduct in-person solicitation at residential dwellings before 9:00 a.m. and after 7:00 p.m. or civil dusk, whichever is earlier.

Another mandated provision common for door-to-door, but unique for MLM, is that under the second notice order RESs shall perform criminal background checks on, "all employees and agents engaged in in-person solicitation."

Under an earlier proposal, the criminal background check would have been required to be performed, "by an independent contractor that is a licensed private detective or a similarly qualified entity." The second notice order deletes this prescriptive language concerning the type of entity which is required to be used to perform the background check.

The provisions described above will only apply to residential and small commercial customers (under 15,000 kWh annually)

Docket 15-0512

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