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PUC Staff Says Retail Suppliers Are Required To Record & Maintain All Sales Calls (Including Non-Sales) As Means Of Complying With Marketing Rules (No Explicit Requirement In Rules)

January 9, 2023

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Copyright 2010-21
Reporting by Paul Ring •

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As part of a brief concerning a Public Utilities Commission of Ohio investigation into RPA Energy, PUCO Staff alleged that retail energy suppliers are required to maintain records of all telephonic sales calls, including those which do not result in a sale

There is no explicit rule which mandates that retail suppliers record and maintain all of their sales calls in Ohio

However, PUCO Staff essentially argued that such obligation exists because suppliers are required to be able to demonstrate compliance with rules prohibiting misleading and deceptive practices. Staff alleged that the demonstration of such compliance necessarily requires the recording of all sales calls

In an earlier Staff report in the proceeding, Staff did not appear to explicitly take the position that all sales calls must be recorded by suppliers, in order for suppliers to demonstrate compliance with the marketing rules

Relevant rules (Ohio Adm.Code 4901:1-29-04 and 4901:1-21-04) for electric and gas suppliers generally provide that (electric rule quoted; the gas rule is substantively similar): "Each competitive retail electric service provider shall establish and maintain records and data sufficient to: (1) Verify its compliance with the requirements of any applicable commission rules. (2) Support any investigation of customer complaints."

Staff alleged, "RPA’s vendors record all sales calls, but do not maintain the sales calls that do not result in sales. This is clearly against the express language of Ohio Adm.Code 4901:1-29-04 and 4901:1-21-04, which require, in part, for providers to establish and maintain records and data sufficient to verify its compliance with the requirements of any applicable commission rules." (emphasis added)

As an example, Staff noted that Ohio Adm.Code 4901:1-21-05(C) states, in part, that, "no CRES provider may engage in marketing, solicitation, or sales acts, or practices which are unfair, misleading, deceptive, or unconscionable in the marketing, solicitation, or sale of a CRES."

"In order to verify compliance with Ohio Adm.Code 4901:1-21-05(C) for telephonic sales calls providers have to maintain all sales calls since the rule protects all consumers, not just consumers that have been duped by unlawful sales practices," Staff alleged

Staff noted that Ohio Adm.Code 4901:1-21-05(C)(8)(a) states, in part, that,
"[U]nfair, misleading, deceptive, or unconscionable acts or practices include, but are not limited to, the following... advertising or marketing offers that… claim that a specific price advantage, savings, or guarantee exists if it does not," (emphasis by Staff)

"[U]unfair, misleading, deceptive, and unconscionable practice is not limited to successful sales; it applies to all advertising and marketing offers," Staff said

Staff's interpretation would also seem to provide that any and all interactions with customers (including door to door visits or other in-person marketing) are required to be recorded and maintained by retail suppliers, in order to demonstrate compliance

Such an interpretation is notable, especially with respect to door to door marketing, because the (unchanged) record retention rules quoted above date back to the early 2000s, before the advent of ubiquitous and inexpensive video recording capabilities.

It should be noted that the term "customer" is defined in the rules as meaning a person who contracts with, or "is solicited by", a retail supplier

Staff said that RPA should pay a forfeiture for allegedly failing to establish and maintain records of unsuccessful sales calls (Staff's brief does not alter Staff's recommendation from an earlier Staff report for a $1.5 million fine, but the Staff brief alleges that a higher fine could be supported by the evidence as alleged by Staff)

RPA Energy disputed Staff's interpretation in its post-hearing brief. RPA Energy's brief in this respect is more tailored to addressing Staff allegations that RPA did not produce certain records alleged to be held by certain of its vendor(s), but RPA's arguments also, in part, address the broader point of any obligation to maintain records of sales pitches that do not result in sales. As noted, Staff alleges that RPA’s vendors record all sales calls, but do not maintain the sales calls that do not result in sales.

RPA Energy alleged that the rules cited by Staff require the Company to establish and maintain records and data for two specific purposes

RPA Energy said that the first of these purposes is to, "“verify its compliance with the requirements of any applicable commission rules."

RPA alleged, "Applicable rules require the Company to record and maintain TPVs, archive customer contracts for certain periods, keep records of customer complaints, and things of this nature. Compliance with these rules is demonstrated by producing the record required under the rule."

RPA alleged, "No rule requires the Company to create, maintain, or produce records about the back-office operations of its vendors. Every record required under the rules has been maintained and produced to Staff on request."

RPA alleged that the second part of the rule requires that records be maintained to, "support any investigation of customer complaints."

RPA alleged, "Staff requested this information to support its own investigation, not that of any customer. Nonetheless, call recordings involving specific customers were provided to Staff. Hundreds of recordings, in fact. Staff apparently reads the phrase 'support any investigation of customer complaints' as a standing, general directive to not only produce any record of anything on demand, but to act on Staff’s behalf to request information from third parties. The primary obligation under the rule is to 'establish and maintain records,' and language describing the purpose of this obligation ('support any investigation of consumer complaints') does not require the Company to 'support' Staff investigations by doing whatever Staff says."

RPA alleged, "Regardless of the scope of any recordkeeping or production obligation these rules impose, suppliers cannot produce that which is not in their possession, custody, or control. Simply put, the Company does not have the information Staff is requesting and there is no evidence in the record to the contrary. Staff’s framing of this issue as the Company 'refusing' to provide the requested information about the vendor’s recording system ignores this explanation and assumes, without any basis, that the Company had possession, custody, or control of the information."

The briefs also address other allegations from Staff concerning alleged instances of deceptive marketing and alleged non-compliance with enrollment and TPV rules. Staff continues to seek rescission of the RPA Ohio licenses and re-rates for certain customers

See our prior stories listed below for background on the matter

PUC Opens Investigation Of Retail Supplier Over Alleged Deceptive Marketing

PUC Staff Seek $1.5 Million Forfeiture Against Retail Supplier; Revocation Or Suspension Of License; Return Of Some Customers To Default Service

RPA provided the following statement concerning the matter at large:

"As explained in the Company’s initial brief, we disagree with Staff’s position and recommendations. We look forward to the conclusion of the briefing process, and an expeditious resolution of this matter."

--- Statement from RPA Energy

More news from the post-hearing briefs will be covered tomorrow


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