Retail Supplier To Pay $115,000, Also Provide Nearly $200,000 In Refunds, Under Settlement With PUC Staff

January 15, 2021

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Reporting by Paul Ring • ring@energychoicematters.com

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Major Energy Services LLC and Major Energy Electric Services LLC ('Major' or 'Company') and the Staff of the Public Utilities Commission of Ohio ('Staff') entered into a stipulation under which it will pay $115,000, plus provide nearly $200,000 in refunds, to resolve all of the issues identified by the Staff in its Notice of Probable Non-Compliance dated January 10, 2020 ('Notice Letter')

The Stipulation is not an admission or a finding of liability.

In the Notice letter, Staff had alleged, "Staff’s review of customer complaints revealed a pattern of deceptive behavior from agents representing Major Energy."

In the Notice letter, Staff had stated, "Between October 1, 2019 and December 17, 2019, the Commission’s call center received 14 contacts from consumer’s disputing their enrollment with Major Energy. During Staff’s investigation into these contacts, Staff found evidence that someone other than the consumer, or a person authorized to make decisions for the consumer, enrolled the consumer’s account with Major Energy. When Staff requested the signed contract for the enrollment, Major Energy provided a document which appears to be an 'order confirmation' with a 'signature' depicted, but was unable to provide the requested signed contract." Staff noticed that several door-to-door sales agents from one vendor were involved in the disputed enrollments.

Staff's alleged instances of Probable Non-Compliance Violations as detailed in the Notice letter are described more fully below

After receipt of the Notice letter, Major ceased all door-to-door marketing and enrolling activities in Ohio until all matters are resolved.

Major conducted an audit of each door-to-door enrollment completed by the Company within the 12 months prior to the Notice Letter to determine whether the customers were enrolled properly.

The stipulation includes the following provisions:

Major will absolve all customers enrolled by Major through door-to-door sales during the period audited of all charges for the first 30 days of Major supplying service and re-rate all of these customers back to the utility’s price-to-compare for the remaining months that the customers were enrolled with Major. This refund totals $198,385.28 to all customers, averaging $165.00 per customer. The refund will be provided via a prepaid Visa card.

Major agrees to make a payment of $115,000 to the State of Ohio upon approval of this Stipulation by the Commission.

Major will implement the following additional quality assurance measures to ensure compliance during the enrollment and verification process:

• Enrollments will take place only on company-issued tablets;

• Enrollments will be validated by an enhanced third-party verifier ('TPV') with voice analytics;

• The Company will validate customer information obtained during the enrollment process through a three- and four-way matching process;

• Major will call customers to confirm the customer’s intent to enroll; confirm certain customer information, and reinforce the contractual relationship; and

• The Company will send welcome packages to customers through either electronic or paper mail.

Sales agents will be monitored and customers will be surveyed in order to analyze TPVs, the agents’ actual enrollments and successful competition of TPVs, the number of customer contacts with Major’s call center, customer churn, and customer complaints.

Major will implement a new tablet enrollment process that includes Ohio’s specific requirements and the paper customer contracts will match the tablet contract.

Customers will have the option to receive the signed contract via email or a paper copy at the time of enrollment. The customer will receive a paper copy of the signed contract in the welcome package.

The tablet enrollment process will include a section for confirming the customer’s agreement to receive communications from Major electronically through email, text, or digitally.

Major has and will continue to cease door-to-door enrollments until this Stipulation and Recommendation is approved by the Commission.

In the Notice Letter, Staff had alleged the following Probable Non-Compliance Violations

1. Ohio Revised Code (R.C.) 4928.10 states, in part, that 'Rules adopted under this section shall include a prohibition against unfair, deceptive, and unconscionable acts and practices in the marketing, solicitation, and sale of such a competitive retail electric service and in the administration of any contract for service, and also shall include additional consumer protections * * *.'

2. Ohio Adm.Code 4901:1-21-03(A) 'Competitive retail electric service (CRES) providers shall not engage in unfair, misleading, deceptive or unconscionable acts or practices related to, without limitation the following activities: (1) Marketing, solicitation, or sale of a CRES. (2) Administration of contracts for CRES (3) Provision of CRES, including interactions with consumers.'

3. Ohio Adm.Code 4901:1-21-03(C)'CRES providers shall not change or authorize the changing of a customer’s supplier of retail electric service without the customer’s prior consent, as provided for under rule 4901:1-21-06 of the Administrative Code.'

4. Ohio Adm.Code 4901:1-21-06(C) 'CRES providers are prohibited from enrolling potential customers without their consent and proof of that consent as delineated in paragraph (D) of this rule.'

5. Ohio Adm.Code 4901:1-21-06(D)(1)(a) 'Where enrollment occurs by mail, facsimile, or direct solicitation, the customer’s signature on a contract shall constitute consent.'

6. Ohio Adm.Code 4901:1-21-06(D)(1)(h), which requires that residential customers enrolled through door-to-door solicitation complete an independent third party verification.

7. Ohio Adm.Code 4901:1-29-03(A) 'A retail natural gas supplier ['CRNGS'] or governmental aggregator shall not engage in unfair, misleading, deceptive, or unconscionable acts of practices related to, without limitation, the following activities: (1) Marketing, solicitation, or sale of a competitive retail natural gas service. (2) Administration of contracts for such service. (3) Provision of such service, including interactions with customers.'

8. Ohio Adm.Code 4901:1-29-03(D) 'A retail natural gas supplier or governmental aggregator shall not change or authorize the changing of a customer's supplier of competitive retail natural gas service without the customer's prior consent, as provided for under rule 4901:1-29-06 of the Administrative Code.'

9. Ohio Adm.Code 4901:1-29-06(B) 'A retail natural gas supplier and governmental aggregator is prohibited from enrolling potential customers without consent and proof of that consent as delineated in paragraphs (C), (D), and (E) of this rule.'

10. Ohio Adm.Code 4901:1-29-06(D)(1)(a) 'Where enrollment occurs by mail, facsimile, or direct solicitation, the customer’s signature on a contract shall constitute consent.'

11. Ohio Adm.Code 4901:1-29-06(D)(6)(b), which requires that residential customers enrolled through door-to-door solicitation complete an independent third party verification.

Staff had originally proposed a forfeiture of $230,000

Case No. 21-0046-GE-UNC

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