PSC Staff Seeks Show Cause Order Against Another Retail Supplier, Several Allegations Again Address What Constitutes "Executed" Contract
February 14, 2023 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
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The Staff of the Public Service Commission of Maryland filed a complaint against Greenlight Energy Inc. (Greenlight or the Company) and asked that the PSC direct Greenlight Energy Inc. to show cause why its license to provide electricity should not be suspended or revoked or, in the alternative, why the Company should not be precluded from soliciting additional customers and why Greenlight should not be subject to a civil penalty under Sections 7-507 and 13-201 of the Public Utilities Article (PUA) for, as alleged by Staff, "committing fraud and engaging in deceptive practices," and other violations alleged in the complaint
Staff alleges that, "Between June 9, 2020, and September 14, 2022, the Commission’s Consumer Affairs Division ('CAD') received 34 customer complaints concerning Greenlight. After investigation and in accordance with CAD’s complaint procedures, CAD found in favor of the customer in 24 of these cases. Staff reviewed each of the complaints received by CAD during the time period and concurs that Greenlight violated Maryland law, including the consumer protections provisions of COMAR for electric and gas suppliers, as well as consumer protection provisions of the Maryland Commercial Law Article ('MD Com. L')."
Staff alleged that, "In its review of contracting documents from Greenlight, information provided by CAD complainants, and communications from Greenlight sent in the course of the CAD complaint resolution process, Staff concurs with CAD’s determination that Greenlight is in violation of COMAR for failure to provide customers with a valid contract as required by Maryland law."
Staff alleged that, "In its review of CAD complaints, Staff found 14 violations of COMAR 20.53.07.08(B)(1), which states, 'At the time of completion of the contracting process, a supplier shall provide the customer a copy of the executed contract and completed Contract Summary on the form provided by the Commission' [italics added for emphasis [by Staff]]."
Staff alleged, "Staff’s review supports CAD’s finding that Greenlight failed to provide customers with a valid contract for internet, phone, and door-to-door enrollments."
Staff alleged, "Due to invalid enrollments and insufficient contract materials, customers are receiving bills with variable rates well above SOS. Allowing insufficient contracts to stand would fall short of the Commission's role to enforce the law and intent of COMAR and the MTSA."
Staff alleged, "With regard to internet enrollments, COMAR 20.53.07.08C(3)(a) and COMAR 20.59.07.08C(3) requires a supplier that contracts with a customer by means of the Internet to: '(i) Confirm the identity of the person making the contract; (ii) Comply with applicable Maryland and federal law...'"
Staff alleged, "In its review of CAD complaints and contract documents, Staff found Greenlight does not provide a contract for internet enrollments."
Citing a customer complaint from an online-enrolled customer, Staff alleged, "Although the documents provided by Greenlight to the customer included a price disclosure (variable or fixed) and terms of service document, and a contract summary, these documents, separate or together, fail to constitute a contract with the minimum information required pursuant to the rules for electric and gas suppliers at COMAR 20.53.07.08 (A) and COMAR 20.59.07.08 (A)."
Staff cited the 2022 precedent from the PSC is another supplier formal complaint proceeding, which found that, "the substance of a contract summary is different from a contract and is insufficient to meet the requirements of disclosure of material contract terms and conditions."
Staff alleged, "Additionally, on January 27, 2022, CAD opened Complaint No. 00035214 in which a customer was enrolled in supply services via social media in response to an offer for a free security camera. CAD found that the social media enrollment form does not satisfy the requirements for a supplier contract. In correspondence, Greenlight representatives acknowledged that the two step process for internet enrollments consists of only the social media enrollment form, terms and service document, and contract summary. None of these documents constitute a contract with the minimum information required pursuant to the rules for gas and electric suppliers at COMAR 20.53.07.08 (A) and COMAR 20.59.07.08 (A)."
Staff alleged, "For internet enrollments, Greenlight failed to provide a signed contract. The social media enrollment form is neither a contract nor a contract summary. Specifically, the social media enrollment form described in the two-step process fails to provide important information at the time of contracting required pursuant to COMAR 20.53.07.08 (A)(2) and COMAR 20.59.07.08 (A)(2), including but not limited to: a list and description of the contract services, billing procedure description, statement of the contract duration, and a statement that the customer may terminate the contract early. The limited information provided by Greenlight does not allow customers to make an informed decision."
Staff alleged, "Although some of this information might be provided in the terms and conditions, it is not in an executed contract as required under COMAR and Consumer Protection Law."
"An executed contract requires compliance with all the minimum contract requirements outlined in COMAR 20.53.07.08 (A) (italics added). Examples of elements missing from the documents Greenlight has sent to customers include: a list and description of the contract services, billing procedure description, statement of the contract duration, and a statement that the customer may terminate the contract early," Staff alleged
Staff alleged, "Greenlight’s welcome letter including
the terms and conditions and contract summary does not provide an executed contract."
With regard to contracting via telephonic sales -- an issue which the PSC has addressed in prior proceedings, Staff alleged, "With regard to telephone enrollments, CAD determined that Greenlight Energy provided no supplier contracts with or without signature. CAD recognized that in response to telephone enrollments, Greenlight Energy provided only copies of a Contract Summary, Terms & Conditions, and a Third-Party Verification ('TPV'). CAD determined that Greenlight failed to provide the required supplier contract following the TPV as required by COMAR and the MTSA for telephone solicitations.9 Staff agrees with CAD’s finding that, regarding telephone enrollments, a TPV is not a substitute for a written contract. A TPV is performed after the contracting process. The materials that Greenlight attempts to substitute for a contract fail to meet the contracting requirements of COMAR 20.53.07.08 (A)(2) and COMAR 20.59.07.08 (A)(2)."
Staff alleged that, "COMAR 20.53.07.08(B)(2), specifies that the contract summary along with the contract must be sent to the customer even if the company is exempt from the Maryland Telephone Solicitations Act (MTSA). Under this regulation, the company would only be exempt from requiring a wet signature on the actual contract. COMAR 20.53.07.08 (B)(2) provides that, 'If the contract is exempt from the MTSA, the supplier shall send the Contract Summary with the contract to the customer.'"
Staff alleged, "Although CAD determined, in [a customer] complaint, that Greenlight provided evidence to support exemption from the MTSA based on the pre-existing business relationship, that exemption does not relive Greenlight of the requirement to provide a contract to the customer."
Staff alleged, "No MTSA exemption relieves suppliers of the requirement to provide a contract to the customer. Greenlight failure to provide contracts to customers enrolled via telephone solicitation is a violation of COMAR regardless of MTSA exemption."
Staff alleged, "With regard to door-to-door enrollments, CAD determined that Greenlight Energy failed to provide supplier contracts. CAD concluded that the document Greenlight provided to door-to-door enrollees entitled, 'signature page to service agreement,' is not compliant with COMAR or the Maryland Door to Door Sales Act."
Staff alleged, "Greenlight repeatedly failed to provide supplier contracts after being notified by CAD complaint decision letters that its practices are in violation of COMAR. The nature and volume of Greenlight’s violations of Maryland’s consumer laws warrant that the Commission levy penalties against Greenlight in accordance with its discretion and Maryland law."
Staff also alleged instances of slamming. Staff alleged, "Greenlight Energy allowed the spouses of customers, instead of the customers of record, or account holders, to enroll online."
Staff alleged, "Several of the complainants were also subjected to instances of agent misconduct and misrepresentation. For example, on March 3, 2022, CAD opened a complaint in which a customer was enrolled via telephone solicitation despite the customer’s reported difficulty understanding the agent and explicit statement that they did not have interest in enrolling but were willing to provide contact information to receive additional materials. Complaint No 00035387 shows a similar, but more egregious pattern of unauthorized enrollment through a process that does not require affirmative consent pursuant to COMAR 20.53.07.08 (C)(1). In that case, the complainant was enrolled without affirmative consent. Greenlight claimed that the customer submitted an online enrollment but could not or did not provide CAD with any evidence of a completed contract in the customer’s name. The customer alleged that they were not responsible for the submission of the online enrollment. In the process of investigation, Greenlight failed to provide CAD with any completed contract in the customer’s name. Greenlight provided only blank contract materials."