PUC Opens Investigation Of Retail Supplier Over Alleged Deceptive Marketing; Staff Sought $300,000 Forfeiture -- EnergyChoiceMatters.com

PUC Opens Investigation Of Retail Supplier Over Alleged Deceptive Marketing; Staff Sought $300,000 Forfeiture

Investigation Stems, In Part, From Sales Call To Chief PUC Staffer, Which Was Allegedly Manipulated

April 20, 2022

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Reporting by Paul Ring • ring@energychoicematters.com

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The Public Utilities Commission of Ohio voted to open an investigation of RPA Energy, Inc., d/b/a Green Choice Energy for alleged instances of deceptive marketing and alleged non-compliance with enrollment and TPV rules

RPA Energy provided the following statement concerning the matter:

"The incidences described by Staff do not reflect the Company’s values. Although we disagree with some of Staff’s characterizations, upon receiving the Notice of Probable Non-Compliance, we voluntarily suspended all marketing in Ohio, terminated certain vendors, and enhanced our compliance function. We look forward to demonstrating to the Commission’s satisfaction that these were isolated incidences that will not be repeated."
--- Statement from RPA Energy

PUCO Staff ("Staff") previously issued a Notice of Probable Non-Compliance to RPA on October 6, 2021

RPA has voluntarily, at the urging of Staff, ceased marketing in Ohio after receiving the Notice.

Staff said that, "After many discussions, RPA and Staff were unable to resolve the issues raised in the Notice."

Staff alleged, "In late February 2021, based on review of customer contacts to the Commission’s call center, Staff became concerned about RPA’s marketing and enrollment practices. During the course of Staff’s investigation into a customer contact to the Commission’s call center, after reviewing the sales call audio recording RPA provided to Staff, Staff began to suspect that the recording was altered. Staff began monitoring RPA’s customer contacts at that time. From January 1 to October 1, 2021, the Commission’s call center received 35 contacts regarding RPA. Upon review of the investigations into the customer contacts, Staff identified a pattern of misleading and deceptive practices in both RPA’s door to door and telephonic sales practices as outlined in the Notice letter."

Staff alleged, "Staff is aware of at least one instance of RPA submitting a manipulated telemarketing sales call to Staff as part of a response to an investigation," and further alleged the number used in such sales call was spoofed

Specifically, Staff alleged, "On June 4, 2021, the Chief of the Commission’s Reliability and Service Analysis Division, Barbara Bossart, was solicited on her personal cellphone by a sales agent representing RPA. The number that showed on her caller ID was (614) 478-5676. Upon answering, she was greeted by an automated message instructing her to press 1 to get a $50 discount and a gift card. After pressing 1, she spoke to a sales representative. The agent made several misleading and deceptive statements, so Mrs. Bossart documented the call and emailed the information to a supervisor in the Commission’s call center. The following Monday, June 7, 2021, she was again solicited by a different sales agent who provided similar information as the previous representative. Mrs. Bossart completed the enrollment. Mrs. Bossart then filed a complaint with the Commission’s call center. The investigator requested RPA submit the sales recording, third-party verification (TPV) recording, and the contract associated with Mrs. Bossart’s enrollment. After listening to the recordings provided by RPA, Mrs. Bossart determined that parts of her conversation with the sales agent were not included in the call."

Staff alleged, "In addition to Mrs. Bossart’s complaint, the Commission’s call center received a customer contact where the customer provided a video recording of his and his son’s interaction with a door-to-door sales agent for RPA. After reviewing the video recording, Staff determined that RPA’s door-to-door sales agent engaged in misleading and deceptive marketing and solicitation practices."

Staff alleged, "During the course of another investigation into a customer complaint to the Commission’s call center, RPA informed Staff that the customer’s husband, 'James,' completed the enrollment. RPA provided a TPV recording and signed contract to Staff as proof of consent for the enrollment. However, the customer in question stated that she lives alone, her husband is deceased, and his name was 'Daniel.' The customer did not know the person on the TPV recording provided by RPA."

Staff further alleged as follows:

• Staff alleged that, "Door-to-door agents informed customers that they were with or working on behalf of the local utility company."
• Staff alleged that, "In sales calls, consumers were encouraged to enroll in RPA’s low 'competitive variable rate' which would be based on 'market conditions.' Consumers were charged a rate around $0.05/kWh for one month with the subsequent rates being over $0.12/kWh."
• Staff alleged that, "In sales calls, consumers were encouraged to enroll in RPA’s low 'competitive variable rate' which would be based on 'market conditions.' Consumers were charged a rate around $0.05/kWh for one month with the subsequent rates being over $0.12/kWh."
• Staff alleged that, "Contracts that were sent to customers because of telephonic enrollment show a customer’s initials on the document. In response to Staff’s data request, the company stated 'Upon successful completion of a TPV, the vendor’s system automatically initials a copy of the contract with the customer’s initials. The initials verify that the customer consents to the contract terms disclosed in the sales call and TPV. The presence of the initials is not intended to convey that the customers initialed the contract'. Staff does not believe there is any other way to interpret initials on a contract than that a customer initialed it. Nothing in the sales or TPV calls or the contract indicates anything different."
• Staff alleged that, "A consumer contacted the PUCO, stating that 'A door-to-door salesman representing "RPA Energy" came to my door running a scam. He got a lot of my info because he lied about his role and the company's offer at first. He name-dropped PUCO several times and convinced me they were a vetted company. Ultimately, I declined the contract, but I'm worried they still got enough info to scam me and I'm worried they will scam others. PUCO should be very concerned about how this organization is using their name.'"
• Staff alleged that, "Staff also reviewed a number of TPV recordings for both door-to-door and telephonic solicitations. In at least one door-to-door enrollment case, according to the TPV recording, the sales agent remained at the home for part, if not all, of the verification"

Staff further alleged, "Additionally, the TPV recordings and TPV script RPA provided to Staff are not compliant with the Commission’s rules. For example, in the TPV recordings, the TPV agent informs consumers that a contract will be emailed or texted to them within five business days, which violates the requirement that contracts be immediately provided to the customer upon door-to-door enrollment or sent within one business day of a telephonic enrollment. (Ohio Adm.Code 4901:1-21-06(D)(1)(d), (D)(2)(b), (D)(2)(a), and 4901:1-29-06(D)(4), (D)(6)(c), (E)(2)(a)). Most TPV recordings reviewed by Staff did not disclose the $5.00 monthly fee to customers, which violates the requirement that TPVs provide customers with the principal terms and conditions of the contract. (Ohio Adm.Code 4901:1-21-06(D)(2)(a) and 4901:1-29-06(E)(1)). Neither the TPV recordings nor the script discloses the factors which impact the monthly variable rate, which violates the requirement that TPVs provide customers with the principal terms and conditions of the contract. (Ohio Adm.Code 4901:1-21-06(D)(2)(a) and 4901:1-29-06(E)(1))."

Staff alleged that, "RPA Energy filed a waiver request with the Commission in case number 21-0157-GE-WVR. The application requests a waiver of certain provisions of Ohio Adm.Code 4901:1-21-06 and 4901:1-29-06. In part, the waiver seeks to send consumers the terms and conditions via email or text message when enrollment occurs via door-to-door solicitation. As of the date of this notice, the Commission has not granted the waiver. However, during the investigation, Staff found that RPA is sending contracts via text message to consumers."

Staff proposed that, for all customers enrolled from May 2021 through present, RPA must take the following actions:

a. For customers who were offered an introductory rate for a variable rate contract, rerate these customers back to the utilities’ price-to-compare unless RPA has evidence that the customers were aware, or should have been aware, that the rate may increase substantially.
b. For customers who were offered a fixed rate that was above their utilities’ default rate, rerate these customers back to the utilities’ price-to-compare unless RPA has evidence that the customers were not misled in the solicitation of the offer. Examples of such misleading actions are outlined above.

Without a limit on the period of enrollment, Staff proposed that RPA rerate, back to the utilities’ price-to-compare, all customers who filed a complaint with the Commission, RPA, or any other entity (ex. Better Business Bureau and local utility) disputing their enrollment.

While RPA voluntarily agreed to cease marketing in Ohio after receiving the Notice, Staff proposed that RPA suspend all marketing and enrollment activity for a period of 2 years from the date of the original notice.

In the original notice, Staff proposed a forfeiture of three hundred thousand dollars ($300,000) against RPA for the alleged violations of the Ohio Adm.Code based on the alleged behavior described above

Case 22-441-GE-COI

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