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PSC Staff Files Complaint Against Retail Supplier, Seeks Show Cause Order On License Revocation Or Suspension
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The Staff of the Public Service Commission of Maryland ('Staff') filed a complaint against StateWise Energy Maryland LLC ('StateWise' or the 'Company') and sought an order from the PSC directing that StateWise, "show cause why its license to provide electricity and electricity supply services, and natural gas and natural gas supply services should not be suspended or revoked or, in the alternative, why the Company should not be precluded from soliciting additional customers, and why StateWise should not be subject to a civil penalty under Sections 7-507 and 13-201 of the Public Utilities Article ('PUA') of the Annotated Code of Maryland for committing fraud and engaging in deceptive practices and for failing to comply with the Commission’s consumer protection regulations[.]"
StateWise provided the following statement concerning the matter:
"Statewise is reviewing the allegations in the Staff Report. Statewise takes compliance with the laws of Maryland, and its interactions with customers very seriously. Statewise has been proactive in addressing compliance and regulatory concerns, and looks forward to continuing to work with Staff to resolve any concerns regarding the allegations in an appropriate manner."
--- Statement from Statewise
Staff alleged, "Communications between StateWise and CAD that occurred in May 2020 has led CAD to determine that StateWise is not in full compliance with COMAR with regard to its door-to-door and person-to-person marketing practices."
Staff alleged that, "COMAR 20.53.07.08 and COMAR 20.59.07.08 detail the minimum contract requirements with regard to electricity and gas suppliers, respectively, then go on to specify that, 'a supplier shall provide the customer a copy of the executed contract and completed Contract Summary' when the contracting process is complete."
Staff alleged, "CEU [the PSC's Compliance and Enforcement Unit] found instances where StateWise has not obtained a signed contract from the customer prior to enrollment and only provided a contract summary along with a signed e-TPV form, which is not sufficient to meet COMAR’s contracting requirements."
Staff alleged, "CEU found that none of the consumer complaints filed between May 1, 2019 and May 31, 2020 contained the required supplier contract. Moreover, StateWise failed to provide consumers with the required language in the contract giving notice of the customer’s right to cancel the transaction in violation of Commercial Law § 14-302. Finally, the contract summary lists a different termination fee from the fee set out in the contract terms and conditions, e.g., contract summary reflects a fee of $2.50/month and the terms and conditions reflects a $7.50/month fee."
Staff alleged that the PSC's Consumer Affairs Division reviewed 40 customer complaints against StateWise received from May 1, 2019 through May 31, 2020. "Of those 40 complaints (12 pertaining to misrepresentation, 22 pertaining to unauthorized enrollments, and six pertaining to other issues) 36 resulted in findings in favor of the consumer," Staff alleged
Staff alleged, "Multiple complaints alleged misrepresentation, with complainants stating that they were promised savings, rebates, and gift cards that did not materialize, and some were told the agents were sent by a State agency or employed by a utility. CEU concluded that the multiple
complaints describing this deceptive and unacceptable behavior constitutes a pattern of conduct by StateWise."
Staff alleged, "Since June 1, 2020, Staff found there have been at least 24 additional complaints against StateWise, including ten instances where CAD found the enrollments were invalid, and numerous allegations of false and misleading statements, including ten allegations that the StateWise agent stated or implied they were with or affiliated with a utility. StateWise continued practices that led to invalid enrollments and allegations of fraud even after CAD had notified StateWise of complaints and violations in May 2020. StateWise’s failure to discontinue its illegal contracting practices demonstrates a pattern and practice of willful disregard for the Commission’s consumer protection laws."
Staff requested that the Commission direct that StateWise satisfy the complaint within 30 days by:
1) identifying and refunding affected customers the difference between the billed amounts and the utility rates where no signed contract exists to support the enrollment.
2) defaulting all existing customers to their respective utility within 30 days unless a signed contract is obtained from active customers for continued enrollment with StateWise.
3) requiring that overage charges be included on the contract summary, when applicable, as well as the correct early termination fee.
4) requiring revisions to any StateWise documentation, marketing, and/or training materials to remove 'Spouse' as an authorized person.
5) filing evidence showing just cause as to why its license to provide natural gas or electricity services should not be suspended or revoked or, in the alternative, why the Company should not be precluded from soliciting additional customers, and/or why StateWise should not be subject to a civil penalty under PUA sections 7-507 and 13-201 for (a) committing fraud (b) engaging in deceptive practices (c) slamming, and (d) failing to comply with the Commission’s consumer protection regulations as contained in COMAR 20.59.07. PUA section 7-507(l) states that an electricity supplier or person selling or offering to sell electricity in the State in violation of this section, after notice and an opportunity for a hearing, is subject to a civil penalty of not more than $10,000 for the violation; or license revocation or suspension. Each day a violation continues is a separate violation. PUA 7-603 grants the Commission these same rights for a natural gas supplier.
Staff recommended that StateWise be issued a cease and desist from acquiring any new customers in Maryland until the matter can be considered at a hearing.
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Recommends Supplier's Existing Customers Be Returned To SOS Unless "Signed" Contract Obtained
March 18, 2021
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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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