New York PSC Issues Show Cause Order To ESCO; Directs ESCO To Provide Refunds
Alleged Violations Include Failure To Cease Telemarketing During Declared State Of Emergency
DPS Employees Allegedly Received Cold Calls From ESCO Agents
December 22, 2020 Email This Story Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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The New York PSC issued an order to show cause to SunSea Energy, LLC under which SunSea is ordered to show cause within 30 days, "why Department of Public Service Staff’s identification of apparent violations are incorrect and SunSea’s eligibility to provide retail energy services as an ESCO in New York State should not be revoked; or alternatively, why other consequences as set forth in §2.D.6. of the UBP should not be imposed."
The PSC said in its order that Department of Public Service Staff (Staff or the Department) had sent a Notice of Apparent Failure (NOAF or Notice) to SunSea Energy, LLC (SunSea), an Energy Services Company (ESCO), "identifying multiple apparent violations of the Uniform Business Practices (UBP) including slamming and questionable marketing practices."
"In this Order, the Commission finds that Staff has identified sufficiently credible evidence to support the issuance of an Order to Show Cause (OTSC) concerning SunSea’s failure to comply with the UBP," the PSC said
Of note, Staff has alleged that SunSea failed to cease telemarketing during a State of
Emergency, which if proven to be the case, is in violation of New York State Law and the UBP, the PSC said in its order
The PSC stated in its order that, "In April of 2019, Staff initiated an investigation into SunSea’s market practices based on several complaints that were received through our Quick Response System (QRS). These complaints alleged that a SunSea agent used questionable marketing practices, such as promising a discount, in their attempt to enroll customers. SunSea responded to the investigation by providing audio files of sales calls and Third Party Verification (TPV) calls. Upon review of these recordings, Staff identified UBP violations in both the sales script and the TPV. Additionally, Staff noted that during the sales call, the customers already knew to have their utility bills ready and did not ask questions, which indicated that they had possibly received a prior sales call that was not included in the material submitted by SunSea. SunSea provided a modified sales script to Staff for review, which was approved on May 13, 2019."
The PSC stated in its order that, "From July 5, 2019, to July 30, 2020, the Department received 92 complaints against SunSea through our regular complaint procedure. Staff issued a Notice of Apparent Failure (NOAF) on September 14, 2020, to SunSea to address these complaints which again alleged misleading, and/or deceptive marketing tactics. In 50 of the 92 complaints, customers stated that they were promised savings, senior discounts, and/or rebates by the sales agents during the sales call. In 17 cases, customers complained that they felt misled into believing they were speaking with representatives from the utility company. Additionally, customers complained of receiving multiple sales calls, sometimes on the same day, even after asking to be added to SunSea’s Do Not Call (DNC) list. The enrollment or sales contact dates for 80 of the 92 complaints fell between May 2019 and June 2020, which was after the improvements that SunSea claimed to have implemented."
The PSC stated in its order that, "In addition to the complaints above, two members of DPS Staff received unsolicited 'cold calls' on their personal phones, from representatives of ... SunSea. These calls were unrelated to their duties performed as employees of DPS, but Staff quickly recognized the inappropriate nature of the outreach and reported the calls to senior staff. These calls ... appear to show violations of the UBP[.]"
Further details concerning the cold calls were said to be included in an attachment to the PSC's order, but such attachment was not included in the copy of the order currently posted on the PSC's docket site, nor does it yet appear as a separate document
The PSC stated in its order that, "In the Company’s NOAF response dated October 19, 2020, SunSea failed to adequately address customer concerns and stated that it enrolled all customers in question in accordance with the UBP based solely on the TPV. Additionally, the proof of enrollment was missing from 12 of the cases. Upon review of SunSea’s response, additional QRS complaints, and additional sales calls recorded by the consumers that received them, Staff has determined that SunSea’s marketing is a three-part process. Their marketing process appears to include an initial call to explain the benefits of the offer and obtain customer information, a second call in which the agents follow a script to confirm the customer’s information and intent to enroll, and then the TPV. The sales recordings provided by SunSea are of the second call and the TPV. It appears to Staff that the majority of UBP violations occurred during the initial sales call, which then invalidated many of the customer protections meant to be realized during the subsequent call and TPV processes. Just as in the April 2019 complaints, customers were prepared for the second call with a bill in hand and rarely any questions. In most cases during the second sales call, the sales agent had the customer name and address in advance of the call and in some cases, the customer does not provide their utility account number, but the TPV recording includes it. This was the practice on the two calls outlined below in the Staff Affidavits in Attachment C. From July 31, 2020, through November 4, 2020, the Department has received 24 additional complaints of the same nature. Of the 116 total complaints from July 5, 2019, to November 4, 2020, 34 included sales calls made after March 7, 2020, which is the first date of the State of Emergency in New York."
"Staff has identified additional potential violations including potential violations of records retention requirements and a failure to cease telemarketing during the State of
Emergency, which if proven to be the case, is in violation of New York State Law, and the UBP," the PSC said in its order
On March 7, 2020, Governor Andrew Cuomo declared a State of Emergency due to the Covid-19 pandemic in New York. With this declaration comes the prohibition of telemarketing solicitations to New York State residents.
New York Consolidated Laws, General Business Law Section GBS 399-z 5-a states, 'It shall be unlawful for any telemarketer doing business in this state to knowingly make an unsolicited telemarketing sales call to any person in a county, city, town or village under a declared state of emergency or disaster emergency as described in sections twenty-four or twenty-eight of the executive law.'
The PSC said that, "While the Commission does not have jurisdiction to decide if there is a violation of this law, it can take note of such a violation in determining revocation under UBP §2.D.5.m."
The PSC directed SunSea Energy, LLC to provide refunds to all customers not previously refunded for certain customer complaint cases listed in the order