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Maryland launches team to investigate scamming, deceptive marketing by gas and electric companies

A new division of the Maryland Public Service Commission will investigate energy companies that may be scamming customers into expensive gas and electricity contracts.

The utility regulator announced the creation of a compliance and enforcement unit Tuesday, amid concerns that some companies may be locking customers into contracts without their consent. The commission is reviewing cases against at least four gas and electricity suppliers that are distinct from regulated utilities such as Baltimore Gas and Electric Co., which has not been accused of any wrongdoing.

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The unit will include one new position, a manager overseeing investigations, and about four investigators who currently work on dispute resolution in the commission’s consumer affairs division, said Tori Leonard, a commission spokeswoman.

The announcement marks a shift in the commission’s approach toward consumer protection. In the past, investigations into energy companies have stemmed from consumer complaints, but going forward, Leonard said investigators will “proactively” probe companies’ marketing tactics.

Recent reports from consumer advocates say that, because many consumers don’t understand what they’re being sold or how the energy companies differ from BGE, they are unwittingly entering contracts to buy gas or electricity at rates that can fluctuate and surge well above the rates charged by BGE. The companies can sell the actual gas and electricity commodity in Maryland’s deregulated energy market, but BGE and other utilities remain responsible for distribution and delivery.

In some cases, consumer advocates allege, companies sign customers up for energy contracts without their consent, a practice known as slamming. The commission fined Smart One Energy $561,000 last year based on three customer complaints of slamming.

Energy companies say they are acting within consumer protection laws and take complaints seriously.

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