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Retail Suppliers Not Exempt From Attorney General's New Rules Governing Price Disclosures, Auto-Renewals
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Massachusetts Attorney General (AG) Andrea Joy Campbell announced the adoption of consumer protection regulations addressing, among other things, price disclosures and auto-renewals, and it is understood that retail electric suppliers are not exempt from the new regulations
In addition to statute and DPU rules governing the retail electric market, an existing of set of regulations adopted by the Attorney General already govern the retail sale of electricity, at 940 CMR 19.00
While not specific to retail electric suppliers, retail electric suppliers are not exempt from the AG's newly adopted consumer protection regulations, at 940 CMR 38.00
While Massachusetts General Laws Chapter 93A, relating to consumer protection generally, provides that Chapter 93A does not, "apply to transactions or actions otherwise permitted under laws as administered by any regulatory board or officer acting under statutory authority of the commonwealth...", Massachusetts General Laws, chapter 164, section 102C(a), specifically grants the Attorney General, pursuant to subsection (c) of section 2 of said chapter 93A, the authority to promulgate rules and regulations relative to methods, acts, and practices of electric and generation companies and suppliers.
The AG's new rules at 940 CMR 38.00 specifically provide that sellers in various industries are deemed to have complied with the new regulations to the extent such sellers follow otherwise applicable laws concerning marketing in their industry (such as car dealers, health care providers, credit providers, and sellers of securities). Retail electric supply is not one of the industries exempt from the new 940 CMR 38.00 under this exemption which, for such other industries, recognizes existing or other governing regulations.
Additionally, while not stated as exempt in the regulations, guidance issued by the AG concerning the new regulations states that the new rules do not apply to air transportation. Such guidance does not include retail electric sales as an industry to which the new regulations do not apply
In terms of the applicability of the new regulations, 940 CMR 38.00 applies to acts or practices performed in connection with any
Advertising or marketing, solicitation, or offer of Sale that is Targeted To or results in a
Sale in Massachusetts.
The new regulations apply to Products intended for personal, family, or household use
Product is specifically defined as, "A good, whether tangible or intangible, or service available for Sale or included
as part of a Sale for personal, family, or household use."
As to the new regulations themselves, of most note to retail electric market are regulations concerning the presentation of prices and regulations concerning auto-renewals
Among other new regulations concerning pricing, the new regulations prohibit, "failing to disclose Clearly and Conspicuously, at the time of the
initial presentation of the price of any Product, or any subsequent presentation
thereafter, the Total Price of that Product[.]"
The new regulations further prohibit, "failing to disclose Clearly and Conspicuously, at the time of the
initial presentation of the Total Price of any Product: (a) the nature, purpose, and amount of any fees, charges, or other expenses that
would be imposed on the transaction due to the purchase of that Product
(excluding Shipping Charges and Government Charges) ..."
Furthermore, in addition to such initial disclosures, the new regulations provide that, "in the final
presentation of the price of any Product prior to the Sale of the Product," sellers must disclose the "final transaction amount", inclusive of the Total Price for all Products
purchased as part of the transaction and any applicable Shipping Charges and
Government Charges
Also notable is that the "Total Price" for any product must be disclosed, "prior to
requiring a consumer to provide any personal information, including billing
information, unless said information is collected specifically, and only to the extent
necessary, to facilitate underwriting in connection with the Sale of the Product,
determine the Product’s availability, determine whether the Sale of such Product to
the consumer is legal, or compute an aspect of pricing previously approved by a
Commonwealth insurance or financial regulatory agency[.]"
Under the new regulations, the term Negative Option Feature is specifically defined as including auto-renewals
For Negative Option Feature products, the regulations provide that sellers shall, among other things, disclose Clearly and
Conspicuously, "and in writing,", prior to the consumer's purchase of the Product, the
following information:
• if applicable, that the charges will occur on a recurring basis, unless the
consumer timely takes steps to prevent or stop such charges; and
• instructions as to the mechanism by which the consumer may cancel the
Negative Option Feature [auto-renewal] and avoid being charged for the Product, which shall
comply with the requirements of 940 CMR 38.05(3).
The regulations provide that sellers must provide a "simple mechanism" to cancel an auto-renewal, and that, except as noted below, such mechanism must be in the same medium through which the sale was executed (i.e., a telesale must offer a phone number to cancel; an online sale must offer cancellation through the same website used for enrollment, etc)
For in-person sales, the regulations provide that auto-renewal cancellation must be permitted through either internet or phone, but further provide that an in-person cancellation method is additionally required, "where practical".
For an auto-renewal lasting more than 31 days, sellers must provide the
consumer written notice within no more than thirty (30) and no fewer than five (5)
calendar days prior to the date upon which the consumer must cancel in order to
avoid incurring a subsequent financial obligation
In such notice, sellers must specifically provide, "the calendar date" by which cancellation must occur to avoid charges, and also list "the calendar date" on which new charges would begin (which may present problems given the meter-read based nature of retail electric bills)
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March 4, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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