Retail suppliers may do well to add electric industry expert, and Forbes.com contributor, Peter Kelly-Detwiler to their Do Not Market lists, lest they become fodder for a column and subject to a complaint to the Attorney General

Kelly-Detwiler recently posted to Forbes.com a column warning customers to "beware" of "discounts" or "savings" pitched by energy marketers.

What most caught our attention is the following summation of an experience Kelly-Detwiler had with an unnamed marketer:

"The first was an automated phone call from a company informing me that I was eligible for a ‘discount’ on my electric bill. I waited on the phone line to find out just what the offer was. The representative informed me that his company represented 30 electric suppliers, but in this case, his company had the best rate for me (surprise!). It was 13.5 cents per kilowatt-hour for the next year.

"I asked him how I could know I would actually be saving money, and he referred me to the portion of my current electric bill showing the utility (National Grid of Massachusetts) Basic Service energy rate of 16.27 cents. So it looked like I would save 2.77 cents. Not bad, right?

"The only problem is that the 16.27 cents National Grid Basic Service rate is only in effect until May 1, after which the new proposed rate drops to 9.257 cents for the next six months. I brought that to his attention and he responded, ’yes, but that is only proposed.’ Not exactly the discount power I was looking for. I called the Attorney General and filed a complaint online."

Unfortunately, Kelly-Detwiler did not specify on what grounds he filed a complaint. The complaint may well have been justified and there may have been obvious violations in the actual exchange that are not captured in how it is portrayed by Kelly-Detwiler's summary

However, as the pitch is summarized by Kelly-Detwiler, we fail to see any obvious violations meriting a complaint, unless you want to hang your hat on the marketer's use of the term "best" (which, while perhaps deplorable, is a subjective term).

Based on Kelly-Detwiler's summary, we distill the call to the following:

• The marketer said Kelly-Detwiler was "eligible" for a "discount"

• The marketer said it could offer the "best" rate, which was 13.5¢

• Kelly-Detwiler asks about savings

• The marketer "refer[s]" Kelly-Detwiler to his utility bill

• Kelly-Detwiler cites proposed decreases in the basic service rate; the marketer responds that such rates are "proposed"

Notably while the marketer said that Kelly-Detwiler could reference his current bill to see if he would save, Kelly-Detwiler does not allege that the marketer promised such savings for any length of time or made any guarantee. Indeed, other than the introductory reference to a "discount," it is not apparent from Kelly-Detwiler's summary that the marketer even mentioned savings except in response to Kelly-Detwiler's question, at which time (again as summarized), the marketer only pointed to factual information on the bill.

Moreover, it appears that the marketer was only providing factual information in stating that National Grid's new rate was proposed (Kelly-Detwiler does not allege that the marketer disputed the accuracy of the rate, or provided some wild prediction that the rate could increase when finalized).

So, as presented, we fail to see what merits a complaint to the AG. To be clear, we do not endorse the marketer's approach, and think such approaches give a black eye to the industry and make it harder for the industry to be seen as legitimate. Indeed, we agree such behavior should be brought to light (and more specifically, the marketer named) to shame the company and have potential customers steer clear of such marketer.

But there's a fine line between sleazy marketing tactics, and actually deceptive or misleading behavior that runs afoul of consumer protection regulations. Based on how the call was summarized, we fail to see any evidence of such violations.

Tags:
Massachusetts   Sales & Marketing  

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