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Don't get snookered into switching electric suppliers

Steph Chambers/Post-Gazette

Don't get snookered into switching electric suppliers

Pittsburgh attorney Rob Peirce is warning area residents about telemarketers who might be trying to dupe them into switching electric suppliers using a practice known as slamming.

“We believe more people are receiving these phone calls or recognizing something is amiss,” said Mr. Peirce, managing partner at Robert Peirce & Associates, Downtown.

He says he’s preparing a lawsuit alleging violations of consumer protection laws against multiple electric suppliers in Pennsylvania on behalf of several clients who tell a similar story.

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They first get a phone call from what they believe is their current electric company, because that’s what shows up on caller I.D.

Then they’re asked if they want a lower monthly electric rate. When they say “yes,” they’re told the arrangements will be made and the call ends.

What they’re not told, Mr. Peirce said, is that they’ve been switched to a new supplier under a long-term contract, and that the lower rate is only good for a short period.

Customers typically realize something is wrong when their bill zooms up after the six- to 12-month introductory rate expires, he said. “You think you did the right thing, then you’re stuck in a contract paying much more than you should have,” he said.

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Customers’ new bills look the same as the old ones because the poles and wires companies that deliver the electricity and handles the billing — distributors such as Duquesne Light or Penn Power — haven’t changed.

It’s the company that supplies the kilowatts of power — the part of the service that consumers in Pennsylvania can shop for — that was switched.

“If you don’t check the bottom right corner of the bill showing the actual [supplier] in small print, you wouldn’t know you were switched from company A to company B,” Mr. Peirce said.

“We believe this is deceptive because consumers are not aware they are switching, and they don’t understand that the lower rate isn’t fixed.”

The Pennsylvania Public Utility Commission takes action against suppliers that use misleading or deceptive practices, spokesman Nils Hagen-Frederiksen said.

Suppliers are not permitted to claim affiliation with the electric company distributing the power, he said.

Suppliers also are required to verify a customer’s desire to switch their service.

“If you get a call and like the offer and say go ahead, typically you’ll be transferred to a verifying service or get another call and they will ask you to verify your desire to switch,” he said.

In one case pending before the PUC, a door-to-door sales agent was accused of making verification calls on behalf of consumers, Mr. Hagen-Frederiksen said. The agent allegedly directed verifications to an accomplice, who posed as the customer and authorized the transaction.

Verification calls are archived so the PUC can listen to the conversations and decide if the supplier was following the rules, Mr. Hagen-Frederiksen said.

Suppliers also are required to give customers a written disclosure statement that spells out the terms of the new contract, including how long it runs.

In addition, electric companies must send customers a confirmation notice anytime they decide to switch suppliers, he said.

Being informed is the best protection against being snookered, Mr. Hagen-Frederiksen added.

“If you know how the process works, you know when someone is misleading you.”

Over the past five years, the PUC levied about $3 million in penalties and won some $20 million in refunds for consumers involving energy suppliers, including allegations of slamming (unauthorized switching), deceptive sales practices, failure to honor contract prices and violations of the Do-Not-Call law, Mr. Hagen-Frederiksen said.

Consumers who think they’ve been tricked into switching electric suppliers should gather any documentation they have and contact the PUC at 800-692-7380, he said.

“Our investigators will investigate and work to resolve the situation for the consumer, whether the consumer just changed his mind or whether it was a fraudulent transaction,” he said.

“We have a zero tolerance policy toward slamming.”

Pennsylvanians can shop for an electric supplier at the PUC’s rate comparison website www.papowerswitch.com.

Users enter their zip code and identify their local electric company. The website then generates a list of available suppliers and offers in their coverage area.

“Typically the list is long, maybe 100 or more,” Mr. Hagen-Frederiksen said. But using filters based on preferences can shorten the list. For example, customers can filter for suppliers offering a fixed rate, or alternative power such as wind energy.

For customers who don’t choose a supplier, their electric company will acquire the power on their behalf. That default rate also is displayed on the PUC’s power switch site.

Patricia Sabatini: PSabatini@post-gazette.com; 412-263-3066.

First Published: May 2, 2018, 1:00 p.m.

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