PSC Staff Seek $170,000 Fine Against Retail Supplier, Cessation Of Marketing To New Customers Pending Remedial Program

Staff of the Maryland PSC have requested that the Commission issue a fine of $170,000 to Smart One Energy, LLC ("Smart One" or "SOE") for, among other things, allegedly not obtaining 'wet signatures' for telephonic enrollments

In response to an initial complaint filed by Staff (see our story on the initial complaint here), Smart One Energy had stated that it, "acknowledges that it did not obtain 'wet signatures' in accordance with the Competitive Gas Supply Regulations," for several telephonic sales (see our story on Smart One Energy's response here)

As has been previously reported by EnergyChoiceMatters.com, the Maryland Telephone Solicitation Act requires that customers of various industries solicited via telephone must sign a written agreement to create a valid contract. While there are certain exceptions to the wet signature requirement, none of the exceptions are generally applicable to cold calling.

In a response to Smart One Energy's response, Staff alleged, "Subsequent responses to the discovery of Staff and the Office of People's Counsel ('OPC'), together with the Response to the Complaint, suggests that SOE is likely in violation of Maryland law for every one of the 17,000 + customer accounts it entered into since it was licensed by the Commission in 2011."

Staff alleged, "As to the telephone solicitation and third party verification recordings on which SOE relies to support its assertion that the customer's switch to SOE was authorized, SOE was unable to produce recordings for one of the CAD [Consumer Affairs Division] complaints (which may be itself a violation of Maryland law), and a review of the recordings for the other two CAD complaints reveals that they are rife with statements that are unfair, false, misleading, and deceptive as prohibited by Maryland law, including COMAR 20.59.07.07 A (2)."

Staff sought the following penalties:

1. A fine for each of the three CAD cases identified in the complaint of $10,000 for alleged "slamming," of $10,000 for allegedly failing to provide a Contract Summary, and of $10,000 for allegedly engaging in deceptive telephone solicitations or failure to retain recorded telephone solicitations, all pursuant to PUA §20.59.07 (k) for a total of $90,000

2. A fine of$10,000 a year for each year SOE has operated since 2011 in the amount of $80,000

3. The cessation of all solicitation of new customers in Maryland until the completion of a remedial program approved by the Commission to bring each of SOE's customer accounts into compliance with Maryland law within six months

Staff also sought imposition of an ongoing reporting requirement concerning SOE's operations to Staff