|
|
|
|
|
Initial Decision Would Take Into Account Retail Supplier's Failure To Reach Out To Other Customers Enrolled By Suspect Agent, In Determining Fine For Single Found Instance Of Slamming
The following story is brought free of charge to readers by VertexOne, the exclusive EDI provider of EnergyChoiceMatters.com
An initial decision from a special agent of the Pennsylvania PUC would impose a civil penalty of $2,000 on Palmco Energy PA LLC (Palmco) for what the initial decision would determine was one instance of customer slamming (covering two accounts, one electric and one gas)
The initial decision is notable because the special agent would take into consideration inaction by Palmco with respect to other customers enrolled by the same agent who had enrolled the customer who the initial decision would determine was slammed.
An initial decision is not final and generally, through the filing of exceptions by parties to the proceeding, may be appealed to the full Commission
The allegations concerning the alleged slamming are discussed in our prior story here
As previously reported, an initial decision from October 2024, which included a $2,000 fine on Palmco, was later rescinded after the PUC, "agreed that Palmco, 'has presented evidence to show that there was a due process issue associated with the failure of proper service of important and relevant filings and Commission documents on [Palmco].'" Among other concerns raised in 2024, Palmco had said that Palmco learned of the case only upon publication of the October 2024 initial decision, and Palmco had said in a PUC filing that Palmco had no record of having been served with the complaint at either of the two email addresses that are on file with the Commission.
As a result, the case was remanded, and a hearing was held
On remand, the new initial decision would find that, "Complainant credibly testified that he did not request a change in his supplier for his gas and electric accounts."
The initial decision would find that, "Prior to being enrolled with [Palmco], Complainant never spoke with anyone from [Palmco] and nobody from [Palmco] came to Complainant’s door to solicit his business. Tr. 41. Complainant also explained that the phone number, signature, and email address in [Palmco]’s documents did not belong to Mr. Novak [Complainant]. Tr. 77. Further, he did not receive any notice from [Palmco] that he was enrolled with it as his EGS or NGS."
At the hearing, Palmco had testified as to its enrollment safeguards, including digital confirmation, a geolocation tracker, and the capturing of various information associated with the enrollment (such as the IP address of the agent's and customer's devices)
Palmco had testified that Palmco believed these procedures were followed when enrolling the Complainant, as Palmco received a record of verification to initiate enrollment which had a signature, account number and proper geolocation.
The initial decision states, "However, despite these safeguards, [Palmco] discovered during its investigation of this matter that the email account that was used to complete the enrollment had only been created the day before, or the day of, the enrollment. [Palmco's witness] stated that this gave [Palmco] a reasonable basis to conclude that the agent may have improperly conducted the enrollment on Mr. Novak’s [Complainant] behalf."
According to the initial decision, "[Palmco's witness] explained that while it is not possible to know with certainty how the sales agent falsified the enrollment, it appears that he may have created a phony email address for Mr. Novak [Complainant] and emailed the enrollment link to that email address, where a potential accomplice may have impersonated the customer."
According to the initial decision, "[Palmco's witness] stated that it looked like a valid enrollment based on GPS location and digital verification."
According to the initial decision, "However, the agent was able to 'fool [their] system into completing the enrollment.'"
According to the initial decision, Palmco's witness explained that the door-to-door salespersons are not employees of Palmco. They are employees or contractors of Palmco's business partners. The agent who enrolled the Complainant was doing sales for Palmco via a third-party contract with a sales vendor.
According to the initial decision, the sales agent who enrolled Complainant with Palmco worked with Palmco's vendor for a total of 47 days, from June 21, 2023, through August 7, 2023. In those 47 days, the sales agent enrolled 145 customers. At the time of the hearing, there were two additional complaints filed with the PUC on accounts opened by this sales agent.
According to the initial decision, Palmco informed the vendor that this agent cannot be part of the program and had them placed on the do-not-hire list. Palmco's witness stated that Palmco informed the hiring vendor that if there was any further, "fraud committed by other agents from this particular vendor, [it] would immediately terminate that vendor."
According to the initial decision, Palmco, "has not contacted any of the other 142 customers to ascertain the legitimacy of their enrollments."
Only eight of the 145 customers remain with Palmco, which, according to the initial decision, Palmco's witness classified as unusual.
The initial decision states, "It is concerning that [Palmco] has failed to reach out to the customers enrolled by this sales agent in order to fully understand the depth of the malfeasance. Logic suggests that the three complaints filed with the Commission (approximately two percent of the 145 customers), would not amount to the whole of this salesperson’s transgressions. [Palmco's] failure to address this with the customers will impact the penalty assessed below."
The initial decision further states, "the sales agent who enrolled Mr. Novak [Complainant] with [Palmco] enrolled 145 customers in his 47 days doing door-to-door sales. There were three complaints filed with the Commission regarding this salesperson’s enrollments. [Palmco] discovered that, at the very least, Mr. Novak’s enrollment was fraudulent. [Palmco] has not reached out to the other 142 customers to determine the validity of their enrollments and take corrective measures. In fact, there are eight customers currently enrolled with [Palmco] who may be ongoing victims of this salesperson’s fraud, let alone the other 134 people who may have been negatively affected. [Palmco's] actions or inaction suggests a business practice of accepting the profit of fraudulent enrollments."
The initial decision notes that Palmco has implemented additional safeguards, which the initial decision also takes into consideration in setting a penalty amount
Palmco presented testimony that it now completes outbound welcome calls to new enrollments to confirm that they did, in fact, complete an enrollment, and Palmco does a more extensive review of each enrollment
Palmco's safeguards also now include an analysis of every email address and phone number against a fraud prevention database.
Palmco uses the fraud prevention database to determine if the email address was recently created, whether it existed prior to enrollment, and if it is affiliated with the customer being enrolled
Palmco's witness also stated that Palmco has also implemented systemic processes that prevent potential fraud, such as an anti-spoofing function in its enrollment that blocks agents’ attempts to spoof customer’s addresses during the enrollment process
Palmco has implemented an additional GPS function in its enrollment which gives it the ability to autoblock enrollments at certain distances. This means if an agent is not in the vicinity of the customer, the system will automatically block any enrollment attempt.
At the time of the hearing, Palmco was also in the process of implementing a program that enables it to integrate its enrollment tool with a national database to identify and flag invalid emails and phone numbers in real time, at the point of enrollment. This would enable Palmco to reject fraudulent enrollment attempts before they can even be sent to the utility or be completed in its systems
Palmco's, "implementation of additional safeguards will also influence the penalty assessed," the initial decision states
The initial decision notes that the consequences of the slamming were not serious on the specific Complainant. Complainant was charged a total of $89.49 by Palmco for electricity supply and $0 for natural gas supply. During the time enrolled, Complainant was charged less for his electric supply than he would have been charged by PECO.
In an attempt to resolve Complainant’s concerns, Palmco issued Complainant a $50 courtesy credit, which was applied to Complainant's PECO account. Complainant said that this did not resolve his concerns.
In proposing to set a $2,000 penalty for two accounts that the initial decision would determine were slammed, the initial decision notes that the PUC has previously fined companies $1,000 per account for physically switching EGS service without a customer’s authorization.
As is customary in individual customer complaint cases, the initial decision would direct the PUC's Secretary’s Bureau to serve a copy of the initial decision on the PUC's Bureau of Investigation and Enforcement for any further investigation and action as the Bureau of Investigation and Enforcement may deem appropriate.
Case F-2024-3046076
Copyright 2025 EnergyChoiceMatters.com. Unauthorized copying, retransmission, or republication
prohibited. You are not permitted to copy any work or text of EnergyChoiceMatters.com without the separate and express written consent of EnergyChoiceMatters.com
August 12, 2025
Email This Story
Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
|
|
|
|
|