Electricity Retail Supplier Deceived Consumers, Unlawfully Enrolled Residential Customers, Court Says in Ruling on OPC Complaint
BALTIMORE – Retail supplier SmartEnergy Holdings, LLC unlawfully enrolled Maryland residential electricity customers, engaged in deceptive marketing practices, and must provide partial refunds to its customers, the Circuit Court for Montgomery County ruled today in affirming a Public Service Commission ruling.
The court upheld the Commission’s ruling that SmartEnergy violated the Maryland Telephone Solicitation Act. The court ruling clarifies that the Act—a law intended to protect citizens from telephone marketers—applies to telephone calls made from consumers to businesses if those calls are brought on by a merchant’s advertisement.
“Importantly, the court ruled that the law protects consumers from certain telephone sales, even if the customer calls the merchant in response to the merchant’s advertisement,” said People’s Counsel David S. Lapp. “That interpretation of the law is common sense and helps protect consumers from predatory energy marketers.”
The case involved one of several complaints the Office of People’s Counsel filed at the Public Service Commission against predatory retail energy suppliers for deceptive marketing practices. Those practices have resulted in customers paying exorbitant rates for gas or electricity service.
For its part, SmartEnergy unlawfully enrolled more than 31,000 Maryland consumers, imposing on many of them hundreds or thousands of dollars in excessive rates. SmartEnergy’s filings reveal that it has overcharged its telephone-enrolled customers $6 million, a rate of over $1.75 million per year. Because the Commission agreed to not enforce its decision until appeals are exhausted, SmartEnergy’s customers have received no relief and many continue to pay exorbitant rates for their electricity.
Aside from its ruling on the telephone sales act, the decision issued today separately affirmed the Commission’s findings—advanced by OPC—that SmartEnergy’s marketing practices violated the state Consumer Protection Act by misleading customers with false and misleading information and falsely conveying that its advertising was from the local utility. The court further agreed with the Commission’s finding that SmartEnergy’s telephone sales script deceived consumers.
“Unfortunately, the consumers harmed by SmartEnergy’s practices still have had no relief, and many continue to pay excessive prices,” Lapp said. “This court victory should empower the Commission to act immediately to help these customers.”
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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