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Retail Supplier To Pay $3.5 Million, Agrees To Marketing Stay-out Period In State, Under Settlement With Attorney General
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Palmco Power IL, LLC (Palmco) would pay $3.5 million, and would cease marketing in Illinois during a stay-out period, under a consent decree with the Illinois Attorney General to resolve alleged violations of the Illinois Consumer Fraud and Deceptive
Business Practices Act, 815 ILCS 505/1 et seq., and the Telephone
Solicitations Act, 815 ILCS 413/1 et seq.
Palmco Power IL, LLC, which uses the trade name Indra Energy, provided the following statement concerning the matter:
"Indra Energy has reached an agreement with the Illinois Attorney General's Office to resolve concerns raised regarding certain business practices. While we maintain that we have consistently acted in compliance with the law, regulations, and our customer agreements, we are pleased to have come to a mutual resolution to settle this matter, allowing us to keep our focus on serving our customers. Indra Energy is committed to serving our customers in a compliant manner, following all federal, state, and local laws and regulations. We will continue to work towards innovating and maintaining high-quality, compliant service to our customers while delivering a great customer experience."
--- Statement from Palmco Power
Among other things, the AG alleged that Palmco, "acting through third-party vendors," engaged in the following behavior:
• Misrepresented an affiliation with ComEd or Ameren
• As alleged by the IL AG in a news release, "fraudulently promised free, government-subsidized tablets in exchange for enrollment"
• Slamming
• Altered telemarketing recordings
• Misrepresented that customers would save money by choosing Palmco
• Failed to obtain a customer's consent to continue with a telesale call, as required under Illinois law
• Failed to state the purpose of a telemarketing call at the start of the call, as required under Illinois law
Palmco denies the allegations.
In addition to the $3.5 million payment, part of which will be used for customer restitution as noted below, Palmco agrees to not market to or enroll customers in Illinois for a period of 18 months, starting September 1, 2024
Under the settlement, Palmco Power IL, LLC agrees to not pay its employees, "based only on the volume of sales made by those
employees."
"If the company's compensation plan includes any incentive or penalty for employees
based on sales, then the compensation plan shall also consider the employees' compliance with
the provisions of this [consent decree]," the consent decree states
Palmco Power IL, LLC also agrees to not compensate its vendors, "based only
on the volume of sales made by those employees [sic]."
Under the consent decree, Palmco agrees to comply with various laws and to not engage in specific behavior.
Of note, Palmco agrees not to use the terms "utility choice program," "energy choice program," or
"state choice program" in describing Illinois's electricity restructuring
Palmco agrees not to state or imply that customers are entitled to savings under a state or federal law or specific program
Palmco agrees that its agents shall not request a customer's account number prior to (1) the disclosure of all material terms and (2) the customer affirmatively consenting to the agreement
Palmco also agrees that various disclosures currently required under in-person solicitations will be provided at the beginning of the solicitation (current rule does not expressly provide when such disclosures shall be made; Palmco agrees to the same for telemarketing, but for telemarketing, some, if not all, of the disclosures are already required at the start of a sales call)
Specifically, Palmco agrees, at the start of an in-person sale or telesale, to provide name of the sales agent; the entity that the
sales agent represents (i.e. Palmco); that Palmco is an independent seller
of electric power and energy service certified by the Illinois Commerce
Commission; that Palmco is not representing, endorsed by, or acting on behalf
of a utility or a utility program; and that the purpose of the solicitation is to switch
the customer to Palmco as the customer's electricity or natural gas supplier
Palmco also agrees to adopt various training measures and a compliance monitoring program, including the creation of an independent compliance monitor paid by the Attorney General
From the $3.5 million payment from Palmco, the consent decree establishes a $2.7 million fund to provide restitution, in an amount of approximately $2.7 million with an individual customer's receipt determined by the customer's usage versus the total usage of eligible customers, with such restitution fund used to provide payments to eligible Palmco customers from October 2017 through present
The consent decree provides that, "Nothing
contained in the Complaint or this Consent Decree is intended by the. parties to be deemed or
construed· as an admission of wrongdoing or liability by Indra Energy, all of which Indra Energy expressly denies."
In a news release, the AG alleged that Palmco's actions resulted in Palmco customers paying, "millions of dollars more," than default service
In a news release, the AG alleged, "Consumers who switched to Indra virtually always paid more than if they had stayed with their public utility company, and many of Indra’s victims were seniors."
"My office is committed to protecting Illinois consumers from deceptive practices utilized by some alternative retail electric suppliers, and preventing people from overpaying for the energy they need," said IL Attorney General Kwame Raoul
The consent decree was filed in Docket No. 2024CH10487, Cook County IL circuit court, county department, chancery division
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Retail Supplier Agrees Not To Compensate Employees, Vendors Based Solely On Volume Of Sales
December 18, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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