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Consumer Counsel Asks Regulator To Require Retail Supplier To Cease Door-to-Door, Telemarketing; Send Notice Of SOS Rates To Customers

Alleges Misrepresentations By Retail Supplier

Alleges Retail Supplier's Customers Paid $7 Million More Than Standard Service For 2015-17 Period


April 23, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The following story is brought free of charge to readers by EC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com

The Office of Consumer Counsel has requested that the Connecticut PURA: (1) expeditiously enter a Cease and Desist Order directing Liberty Power Holdings, LLC ("Liberty" or "Liberty Power") to cease door-to-door and telesales marketing to Connecticut residential customers, and (2) order Liberty to issue a Customer Notice Letter notifying each of its existing customers in Connecticut of the rate that Liberty is currently charging the customer for electric generation service and the standard service rate available to that customer at the time of the notice.

A statement from Liberty Power concerning OCC's request appears below.

The OCC alleged in its motion that, "such remedies are vital to protect Connecticut customers from illegal and deceptive sales practices."

OCC further alleged that, "during the years 2015 to 2017, Liberty customers in Connecticut paid approximately $7,719,948 more than they would have had they been on the electric distribution company ('EDC') standard service rate."

OCC alleged that evidence filed in a current PURA proceeding reviewing allegations against Liberty, "demonstrates that Liberty’s agents have, inter alia, (i) misrepresented that the agent is 'with' or affiliated with an EDC; (ii) misrepresented current and prospective standard service rates and the nature of standard service rates as 'variable'; (iii) misrepresented the aspects of the electric bill that Liberty provides service for; (iv) misrepresented actual savings; and (v) misrepresented cancellation fees."

OCC alleged that, "Liberty violated CUTPA [Connecticut Unfair Trade Practices Act] with respect to misrepresentations and deceptive sales practices concerning, inter alia: (i) misrepresenting that sales agents are affiliated with an EDC, (ii) misrepresenting that Liberty itself is affiliated with an EDC, (iii) misrepresenting that Liberty itself is Eversource or The United Illuminating Company ('UI'), (iv) misrepresenting the nature of standard service rates, (v) misrepresenting the amount and frequency of standard service rate changes, (vi) misrepresenting the applicability of distribution charges and other bill elements, (vii) informing customers of cancellation fees in excess of the statutory cap of $50, (viii) guaranteeing impossible savings or avoided costs, and (ix) altering a customer contract."

OCC alleged, "In many calls, Liberty telesales agents either stated or implied they were calling from a utility company, sometimes in response to consumer questions regarding the agents’ business affiliation."

OCC alleged, "Liberty telesales agents often initiate telesales transactions by informing customers that the purpose of the call is in reference to some aspect of a customer’s existing utility bill or utility service. This tactic is often couched in language suggesting that a customer may qualify for some type of benefit on their existing utility bill: [Telesales Agent]: ...Ma’am this call is in regards to your Eversource electric bill, to check if today you can get qualified to receive a fixed rate ..."

"As reflected in the final transcript excerpt cited above, a second common misrepresentation that Liberty telesales agents make to potential customers is that Liberty Power is the authorized electric supplier for the EDCs, rather than one of many, or that it is working on behalf of customers to ensure benefits or savings at the behest of the EDCs themselves," OCC alleged [emphasis by OCC]

OCC alleged that in one instance, in response to the potential customer's inquiry of "What is Liberty Power", a Liberty agent stated, "Ma’am that is the authorize [sic] supplier for Eversource who is giving you all these benefits on your same Eversource electric bill, without changing or switching you from Eversource, okay."

OCC alleged, "the record contains instances of Liberty telesales agents initiating interactions with customers by falsely asserting that the EDCs provided notification to Liberty Power that certain customers’ electric service or rates had expired or been deactivated. In such instances, the telesales agents frame the interaction not as a sales offer but as a need to 'update' customer information for the EDCs"

OCC alleged, "Another recurring misrepresentation that Liberty telesales agents make regarding the EDCs is that the utilities will send customers a “confirmation” letter reflecting their switch to a new electric supply company ... In conjunction with the confusion sown by the telesales agents between Liberty and the EDCs, this particular representation likely influences consumer decisions by operating as an EDC imprimatur or endorsement of Liberty. Not only is this representation deceptive but it is also patently false. As demonstrated in its attached affidavit, Eversource does not send its customers any letter or confirmation notice when a customer switches to a new electric supplier, be it Liberty Power or otherwise. By routinely and inaccurately informing customers that their EDC will send a confirmation letter as part of the Liberty enrollment process, Liberty perpetuates consumer misconceptions that it is working with or on behalf of the EDCs."

OCC alleged, "One of the most common misrepresentations is that the standard service rate is variable, changes from month to month, or can change at any time without warning."

OCC alleged, "Similarly, the record contains many examples of Liberty telesales agents making materially false or inaccurate statements about standard service rates or electric supply rates in general. These representations frequently allege that consumers will soon be subject to fantastically high rate hikes or bill increases that can best be avoided by signing up for service with Liberty Power."

OCC alleged in one instance that a Liberty agent said, "Right now, with Eversource, you’re between fourteen and fifteen cents per kilowatt hour. Come the winter months it’s going to be eighteen to twenty."

OCC alleged, "Many of the same misrepresentations and deceptive assertions that Liberty’s telesales agents make to customers over the phone are also made by Liberty’s field agents in face-to-face interactions at customers’ front doors."

OCC said that PURA should require Liberty to send to its customers a Customer Notice Letter that should include the following information: (1) that PURA is investigating the marketing and enrollment practices of Liberty; (2) the electric generation services rate that Liberty is currently charging the customer; (3) the standard service rate currently available to that customer; (4) the monthly savings the average customer would realize by returning to standard service; (5) that the customer may switch to standard service upon request without penalty; (6) instructions of how the customer may switch to standard service; and (7) how to file a complaint with PURA.

Liberty Power provided the following statement to EnergyChoiceMatters.com:

"Liberty Power was surprised and disappointed to learn of the Office of Consumer Counsel’s (OCC’s) request that PURA order the company to stop all telemarketing and door to door sales activities. The allegations in the OCC’s motion are the subject of an ongoing proceeding initiated by the Public Utilities Regulatory Authority (PURA) on September 7, 2017. As part of that proceeding, the company has provided substantial information in response to numerous and extensive interrogatories issued by both OCC and PURA. A hearing in the matter has already been scheduled.

"When the Connecticut legislature introduced consumer electric supply choice two decades ago, it stated that consumers’ right to choose is 'an essential governmental objective.' Liberty Power has invested heavily in its quality control program and is committed to ensuring that customers are treated fairly and given meaningful choice in securing their electric supply. The company believes that the OCC’s motion is premature and is confident that when PURA evaluates this matter, it will conclude that the measures being sought by the OCC are unnecessary."

Docket 06-12-07RE07

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