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Retail Supplier To Pay $37,500 Under Settlement Related To Marketing Practice

January 18, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Vista Energy Marketing, L.P. ("Vista") would pay a civil penalty in the amount of $37,500 under a Settlement ("Settlement") with the Pennsylvania PUC's Bureau of Investigation and Enforcement (I&E) to resolve allegations that a vendor's agent conducted door-to-door sales on behalf of Vista prior to a background check being completed.

As stated in the Settlement filed with the Pennsylvania PUC, "This matter concerns an informal investigation initiated by I&E prosecutory staff based on information referred to I&E by the Commission’s Office of Competitive Market Oversight ('OCMO'). OCMO became aware of a local news story whereby an agent of Platinum Advertising II EEC’s (“Platinum”), a third-party vendor authorized to hire and train sales agents to market/sell electric generation services on behalf of Vista, was apparently permitted to engage in door-to-door marketing without a proper criminal background investigation being first conducted."

As alleged in the Settlement filed with the Pennsylvania PUC, "On August 30, 2017, a local television station posted an article on its website entitled 'Suspect in rape case worked for local company going door-to-door.' The article reported that a local 23-year-old man ('the suspect') 'was charged last week by Bensalem police with rape and indecent assault of a young woman.' It was reported that the suspect told police officers that 'he was working for Platinum Advertising going door-to-door trying to convince homeowners to change their energy company.' The suspect was not working nor was he engaged in work-related activities when the incident occurred. The article also reported that the assailant had previously pled guilty to the following: aggravated assault in 2015; providing false identification to a law enforcement officer in 2014; and criminal trespass and break-in in 2013."

As alleged in the Settlement filed with the Pennsylvania PUC, "After learning about the article, OCMO contacted Platinum to inquire whether the information reported in the story was correct. Platinum informed OCMO that the suspect was an independent contractor of Platinum selling electric generation services on behalf of Vista. Platinum claimed that it had initiated a criminal background check on the suspect on March 23, 2017; however, a 'clerical error' allowed the suspect to be issued an ID and work as an agent in the field marketing/selling electrical generation services on behalf of Vista."

As alleged in the Settlement filed with the Pennsylvania PUC, "Platinum claimed that on April 14,2017, as a result of conducting a regular audit, it became aware of the suspect’s criminal past and immediately terminated its relationship with him. Platinum claimed that the suspect later reapplied as an independent contractor at another sales office under an assumed name and began selling electric generation services on behalf of Vista again from May 15, 2017 to August 18, 2017. Once the local television station posted its story about the suspect, Platinum again terminated its relationship with him."

As alleged in the Settlement filed with the Pennsylvania PUC, "After sending multiple data requests to both Platinum and Vista, I&E concluded that it was not a 'clerical error,' as Platinum alleged, that allowed the suspect in question to be issued an ID and work as an agent in the field. Beginning on or around March 8, 2017, and ending on or around April 18, 2017, Vista, at Platinum’s request, agreed to allow some door-to-door marketers, including the suspect, to be conditionally approved while their Pennsylvania Access to Criminal History ('PATCH') reports were pending. On April 18, 2017, Vista informed Platinum that it would no longer conditionally approve any more agents until their PATCH reports were received and cleared."

As alleged in the Settlement filed with the Pennsylvania PUC, "During the course of its investigation, I&E concluded that a total of one hundred and twenty-four (124) agents were conditionally approved to sell EGS services on behalf of Vista while their PATCH reports were pending. Once the PATCH reports were received for the conditionally approved agents, Vista terminated two (2) agents due to the results of their PATCH reports, including the suspect. The suspect was permitted to sell EGS services on behalf of Vista from March 23, 2017 to April 19, 2017, and made one hundred and nine (109) sales attempts during that time, but he only enrolled forty (40) residential customers. The other agent who was later terminated once his PATCH report was received and reviewed was permitted to sell EGS services on behalf of Vista from April 21, 2017 to April 27, 2017. I&E was neither able to determine whether any sales attempts were made by this agent, nor quantify the sales attempts made by the rest of the one hundred and twenty-two (122) agents who were also conditionally approved before their PATCH reports were received and cleared by Platinum and Vista."

As stated in the Settlement filed with the Pennsylvania PUC, "On or about August 31, 2017, upon learning about the incident involving the suspect, Vista terminated its relationship with Platinum due to its concerns that only agents with clear criminal background checks be allowed to sell EGS services on its behalf."

As stated in the Settlement filed with the Pennsylvania PUC, I&E was prepared to allege in a formal complaint that Vista failed to comply with the Marketing and Sales Practices for the Retail Residential Energy Market, 52 Pa. Code §§ 111.1-111.14, in that it conditionally approved agents to sell EGS services on its behalf while their PATCH reports were pending. As stated in the Settlement filed with the Pennsylvania PUC, I&E was prepared to allege that Vista permitted the suspect to sell EGS services on its behalf while his PATCH report was pending, during which time the suspect made approximately one hundred and nine (109) sales attempts and enrolled forty (40) residential customers. As stated in the Settlement filed with the Pennsylvania PUC, I&E was prepared to allege that Vista conditionally approved another agent whose completed PATCH report revealed that a prior conviction should have precluded him from selling EGS services on its behalf. As stated in the Settlement filed with the Pennsylvania PUC, I&E was prepared to allege that Vista conditionally approved another one hundred and twenty-two agents (122) to sell EGS services on its behalf while their PATCH reports were pending.

The Settlement states that Vista has put into effect appropriate measures that have been approved by I&E to ensure that such oversight is not likely to reoccur.

As stated in the Settlement filed with the Pennsylvania PUC, "Vista does not dispute the allegations above, fully acknowledges the seriousness of conditionally approving agents to sell EGS services on its behalf while their PATCH reports are pending, and recognizes the need to prevent the reoccurrence of a similar situation."

The Settlement notes that, among other actions, Vista has revised its sales and marketing policies and procedures, as well as revisions to any and all training materials to ensure that Vista and/or its agents strictly adhere to the criminal background investigation requirements of Section 111.4 of the Commission’s regulations, 52 Pa. Code § 111.4. The revisions specifically address the fact that agents may not be conditionally approved while their PATCH reports are pending

In a statement in support of the Settlement filed with the PUC, Vista stated, "Vista is committed to ensuring compliance with all regulatory requirements and is committed to upholding high standards for its marketing vendors. As explained in the Settlement Agreement, Vista has taken all necessary steps to ensure regulatory compliance and has agreed to pay a reasonable civil penalty to resolve this matter."

In a statement in support of the Settlement filed with the PUC, Vista stated, "With respect to the individual referenced in the Settlement Agreement, who was a Platinum agent and subject of the news story of August 30, 2017 which led to the investigation, Vista terminated its relationship with that individual as soon as it received a completed background check on April 19, 2017. When it was revealed that this agent had continued marketing activities for Platinum under an assumed name, Vista immediately terminated its relationship with Platinum."

The PUC is accepting comments on the proposed settlement prior to final action

Docket M-2018-2624484

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