Delegated Commissioner Suggests That Regulator Suspend Or Revoke Retail Supplier's License, In Response To Alleged Obstruction Into Regulator's Complaint Inquiry

May 5, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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The Delegated Commissioner of the Massachusetts Department of Public Utilities has issued a Notice of Probable Violation (NOPV) to Palmco Power MA, LLC d/b/a Indra Energy, alleging, among other things, that Indra Energy, "has obstructed the Department’s review of a consumer complaint," and "provided false reports to the Department."

The Delegated Commissioner suggests that the Department take licensure action, including, but not limited to, a suspension or revocation of Indra Energy’s license. 220 CMR 11.07(4)(c)(1).

The NOPV and the conclusions from the Delegated Commissioner do not represent final agency action.

Indra was directed to respond to the NOPV and may request a hearing.

Indra Energy leadership provided the following statement to EnergyChoiceMatters.com concerning the matter:

"Indra Energy’s highest priority is always serving our customers in full compliance with federal, state, and local laws and regulations. We take any issues raised by regulators with the utmost seriousness and attention. We are thoroughly investigating the matters outlined in the DPU’s notice, and will respond in a timely manner.

"In Massachusetts and around the country, we will continue to serve our customers with the highest integrity and to provide valued customer service."

--- Statement from Indra Energy leadership

The Delegated Commissioner said in the NOPV that, "On February 19, 2020, the Department’s Consumer Division received a complaint alleging deceptive and misleading telemarketing practices by Indra Energy. The Consumer Division directed Indra Energy to provide a recording of the telemarketing call and third-party verification ('TPV') associated with the call. As described below, my review of these materials and information provided by Respondent during our initial review lead me to conclude that it is probable that Indra Energy has engaged in marketing activities that are in violation of the applicable provisions of G.L. c. 164, §§ 1A through 1F and 220 CMR 11.00."

The Delegated Commissioner listed activities alleged to have been conducted by Indra as relating to, "(1) misleading and deceptive information provided during Indra Energy’s telemarketing call, (2) altering the recording of Indra Energy’s telemarketing call, (3) providing false reports to the Department, and (4) obstructing the Department’s efforts to obtain information regarding a customer complaint."

The NOPV states, "On February 18, 2020, the Complainants filed a complaint with the Department’s Consumer Division stating that they received a telemarketing call from Indra Energy, that the telemarketing call began with a prerecorded message before transferring to a live agent, and that the telemarketing call included deceptive and misleading information. The Complainants assert that the telemarketing agent stated that: (1) they would receive 30 percent savings from their current electric bills even though the rate Indra Energy quoted was higher than their current supply rate; and (2) they would no longer have to pay the customer charge and distribution charge that appears on their electric bill."

The Delegated Commissioner stated, "A review of the recording of the telemarketing call shows that it does not include the information described by the Complainants. Additionally, after listening to the recording, the Complainants state that the recording is different from what was said during the call. These facts lead me to conclude that Indra Energy (1) engaged in deceptive and misleading telemarketing activities and (2) provided the Department with an altered version of the telemarketing call."

Among other things, the Delegated Commissioner cited the duration of the call as supporting the Delegated Commissioner's conclusion

The Delegated Commissioner stated, "The caller ID on the Complainants’ phone and the Verizon phone record both show that the telemarketing call was received at 9:21 am (Exhs. DC-Screenshot; DC-Verizon Record). On the TPV recording provided by Indra Energy, the TPV agent identifies 9:40 am as the start time of the TPV call, which indicates that the telemarketing portion of the call lasted 19 minutes (Exh. DC-Tr. 2, at 3). In stark contrast, the recording of the telemarketing call provided by Indra Energy lasted only eight minutes, 37 seconds (Exh. DC-Tr.; Perlmutter_Delmonte – Sales Call 20200217)). The recording of the TPV call provided by Indra Energy lasted four minutes, eleven seconds (Exh. DC-Tr. 2; Perlmutter_Delmonte – TPV 20200217). The combined duration of the call recordings provided by Indra Energy is twelve minutes, 48 seconds. Again, in stark contrast, the Verizon record shows that the telemarketing and TPV calls lasted a total of 23 minutes, eleven seconds (Exh. DC-Verizon Record). Subtracting the four minute eleven second duration of the TPV recording from the Verizon report call duration shows that the telemarketing portion of the call was 19 minutes, or more than twice the duration of the telemarketing call recording provided by Indra Energy. The more than ten-minute difference between the Verizon record and the sales call recording strongly suggests that the telemarketing call was altered."

The Delegated Commissioner further cited additional concerns with the call, as follows:

"First, if the sales call recording has in fact not been altered, it is still very problematic as it contains little to no information regarding the actual terms of the product being sold to the customer. This may violate laws regarding telemarketing solicitation and unfair or deceptive acts or practices. G.L. c. 159C, § 5A; 940 CMR 3.00; 940 CMR 19.00."

"Second, the Complainants’ assertions regarding a 30 percent discount on future bills and that the delivery and customer charges would be eliminated may violate laws regarding unfair or deceptive acts or practices. 940 CMR 3.00; 940 CMR 19.00."

"Third, the Complainants’ statements regarding the call beginning with a pre-recorded message may violate laws regarding use of artificial or pre-recorded voices in telemarketing. G.L. c. 159C, § 3; 47 C.F.R. § 64.1200(a)."

"Fourth, the Complainants’ caller identification stated 'Oracle' rather than Indra Energy or its vendor as the caller (Exh. DC-Screenshot). This may violate laws regarding caller identification service knowingly transmitting misleading or inaccurate caller identification information. 16 C.F.R. § 310.4(a)(8)."

"Fifth, the Department attempted to reach the caller at the number identified on the Complainants’ telephone (Exh. DC-Screenshot). The phone call went to a mailbox and did not identify the name of Indra Energy or its vendor. This may also violate laws regarding failure to transmit a telephone number to any caller identification service in use by a recipient of a telemarketing call. 16 C.F.R. § 310.4(a)(8)."

The Delegated Commissioner alleged, "The telemarketing recording provided by Indra Energy appears to have been altered and to contain telemarketing conduct that is misleading and deceptive. While this one instance cannot demonstrate, with certainty, the extent to which Indra Energy may have engaged in telemarketing conduct that may be misleading and deceptive, it is unlikely that Indra Energy’s conduct described above is an isolated instance."

The Delegated Commissioner recommended that, to determine the extent of any misconduct, the Department should direct Indra Energy to submit to the Department recordings of every telemarketing call conducted on its behalf since January 2018. Further, the Department should require Indra Energy to fund an independent audit of those telemarketing calls; the selection of the auditor and the audit itself should be conducted under the Department’s supervision, the Delegated Commissioner recommended

For each deceptive or misleading telemarketing call that resulted in an enrollment where the customer’s rate is above the basic service rate (based on criteria set forth by the Department), the Delegated Commissioner recommended that the Department should require Indra Energy to refund to the affected customer the difference between what it paid to Indra Energy over the term of the applicable contract and what the customer would have paid had the customer been on basic service.

In addition, the Delegated Commissioner recommended that the Department should assess Indra Energy a penalty up to $25,000 per violation, (i.e., misleading/deceptive telemarketing call), not to exceed $5,000,000 in total, and take appropriate licensure action.

"It would be troubling in the extreme if Indra Energy provided the Department’s Consumer Division with an altered telemarketing call recording. Because of the extraordinary nature of this issue, the Department should direct Indra Energy to fund the services of an expert to determine whether the telemarketing call recording discussed above, as well as the telemarketing recordings that may be provided to the Department as part of the requested audit have been altered; the selection of the expert and the examination of the recordings should be conducted under the Department’s supervision. For each incident where a recording provided by Indra Energy is found to have been altered, the Department should assess Indra Energy a penalty up to $25,000 per violation, not to exceed $5,000,000 in total, and take appropriate licensure action, including, but not limited to, a suspension or revocation of Indra Energy’s license. 220 CMR 11.07(4)(c)(1), (2)," the Delegated Commissioner said

The Delegated Commissioner further alleged, citing written responses to requests from the DPU, that, "After reviewing Indra Energy’s responses, it appears that Indra Energy was not forthcoming in some of its answers, may have attempted to obstruct the Department’s investigation, and provided further false reports to the Department."

The Delegated Commissioner said that, on March 6, 2020, the Department requested Indra Energy to provide copies of sales call recordings from a vendor's telemarketing campaign conducted on behalf of Indra Energy. The Delegated Commissioner alleged that, on March 10, 2020, outside counsel for Indra, provided the following response: "Indra and its vendors do not record or maintain any sales calls. Indra does not require its vendors to record sales calls".

The Delegated Commissioner said, "Despite this statement, on February 19, 2020 Indra Energy did provide a copy of the telemarketing call made to the Complainants. Further, the Respondent’s statement that it does not record or maintain any sales calls contradicts the recording of Complainants’ telemarketing call which states: 'Hi. Just wanted to let you know that this call is being recorded for quality and training purpose [sic],' and Respondent’s telemarketing script." The Delegated Commissioner said that the statement that Indra and its vendors do not record or maintain any sales calls contradicts statements made by Indra Energy regarding its sales calls recording practices made to other state public utility commissions.

"Given these facts, it appears that Indra Energy willfully provided false information to the Department and obstructed the Department’s investigation into consumer protection related matters. For the sake of argument, if Indra Energy does not record its telemarketing vendors’ sales calls, then this lack of oversight presents additional serious concerns," the Delegated Commissioner said

The Delegated Commissioner said that the Department asked Indra Energy to provide the names of the sales agents that participated on the call with the Complainants. The Delegated Commissioner said that Indra Energy’s only response listed a single individual

The Delegated Commissioner alleged, "[O]n the telemarketing call recording, there are three individuals that can be heard: (1) the first of whom the Complainants claim they never spoke with, and who does not introduce himself by name; (2) the second individual, a woman, introduces herself but her name is unintelligible on the recording; and (3) the third individual, a man, introduces himself [by name]."

The Delegated Commissioner alleged, "The above facts suggest that Indra Energy has obstructed the Department’s efforts to review a consumer complaint by providing incomplete or inaccurate responses to the Department’s inquiries."

"The facts suggest that Indra Energy has obstructed the Department’s review of a consumer complaint, provided contradictory information to the Department, and provided false reports to the Department. It is difficult to overstate how troubling such behavior would be. A competitive supplier, licensed by the Department, that provides inaccurate or misleading information to the Department in its review of a consumer complaint precludes the Department from fulfilling its statutory oversight responsibility to provide for the 'utmost consumer protections contained in law.' G.L. c. 164, § 1F," the Delegated Commissioner said

"As Delegated Commissioner, I suggest that the Department take licensure action, including, but not limited to, a suspension or revocation of Indra Energy’s license. 220 CMR 11.07(4)(c)(1)," the Delegated Commissioner said

In summarizing the NOPV, the Delegated Commissioner said, "the Delegated Commissioner has reason to believe that the Respondent’s conduct is prohibited or proscribed under the following statutes and regulations," and listed the following

1. Providing Altered Telemarketing Recordings to the Department

G.L. c. 268, § 6: Willfully making a false report (i.e., providing altered telemarketing recordings) to the Department is punishable by fine, imprisonment, or both.

2. Telemarketing Prohibitions and Required Disclosures

G.L. c. 159C, § 3: A telephone solicitor shall not make or cause to be made an unsolicited telephonic sales call to a consumer by use of a recorded message device.

G.L. c. 159C, § 5A(a): A telephone solicitor shall disclose all of the following information within the first minute of a telephonic sales call and before requesting, accepting or arranging for payment by a consumer: (i) that the purpose of the telephone call is to make a sale or solicit funds; (ii) the correct name of the telemarketing company that employs the individual telemarketer who is making the call; (iii) the correct name of the ultimate seller whose goods or services are being offered by means of the telemarketing call; and (iv) a complete and accurate description of the goods or services being offered including, but not limited to, the retail market value of the goods or services.

G.L. c. 159C, § 5A(b): The telemarketer shall provide all of the following information before requesting, accepting or arranging for payment by a consumer: (i) the cost to the consumer of the goods or services that are the subject of the telemarketing sales call including, but not limited to, any applicable tax, shipping and handling fees; (ii) any restrictions, limitations or conditions attached to purchasing the goods or services; (iii) the complete terms of any applicable refund, return, cancellation, exchange or repurchase policies; (iv) any material aspect of an investment opportunity being offered including, but not limited to, the price of the land or other investment, the location of the investment and the fact that an investor may lose some or all of their original investment.

47 C.F.R. § 64.1200(a)(2) and (3): With limited exceptions (which do not apply here), no person may initiate a telephone call to a residential line using an artificial or prerecorded voice to deliver a message without the prior written consent of the called party. And even then, the message must begin by clearly identifying the business, individual, or other entity that is responsible for initiating the call.

16 C.F.R. § 310.4(a)(8): With limited exceptions (which do not apply here), it is an abusive telemarketing practice for a telemarketer to fail to transmit the telephone number, and, when made available by the telemarketer's carrier, the name of the telemarketer, to any caller identification service in use by a recipient of a telemarketing call.

3. Unfair or Deceptive Acts or Practices

940 CMR 3.00: Attorney General’s regulation to determine whether conduct, terminology, or representations involve unfair methods of competition or unfair or deceptive acts or practices, in violation of G.L. c. 93A, § 2(a).

940 CMR 19.01: Attorney General’s regulations pertaining to the competitive electricity market to protect consumers from unfair or deceptive acts or practices and to provide retail electricity sellers and marketers with notice of the illegality of such acts or practices. Violations of these regulations are a violation of G.L. c. 93A, § 2(a).

"While the Department does not have the authority to enforce laws outside its jurisdiction, one or more legally significant bad acts may be cause for the Department to investigate a competitive supplier. Conduct that is prohibited by statute or regulation would likely constitute conduct that may constitute egregious misconduct or a pattern of misconduct under 220 CMR 11.07(4)(c)," the Delegated Commissioner said

Docket D.P.U. 20-48

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