DISCUSSION

In Decision (D.)00-03-020, R.97-08-001, p 3 we said:

"The Commission's constitutional, statutory, and policy directives all accord consumer protection the highest priority."

In that same decision, p 14, we stated:

"SB 378 requires each person, corporation, or billing agent that charges for a product or service on a telephone bill or separate bill within the telephone envelope to do all of the following: (1) ensure that there is a clear and concise description of the product or service on the telephone bill; (2) include the amount charged for each product or service including taxes and surcharges; (3) explain how to resolve any dispute about the charges including the name, address and telephone number of the party responsible for generating the charge and a description of dispute procedures; (4) provide the telephone number at the Commission where a consumer may register a complaint; (5) establish, maintain, and staff a toll-free telephone number to respond to questions or disputes about the charges billed; (6) provide a means for expeditiously resolving subscriber disputes of charges that were not authorized; and (7) resolve all billing disputes within 30 days of receipt of the dispute."

Although D.00-03-020 and SB 398 relate to telephone utilities, we will hold energy utilities to the same standard where applicable.

We will review, by item, how SoCalGas' proposal for a credit/debit card payment option compares with the requirements placed on telephone utilities by SB 378 (Stats. 1998, Ch. 1041) that adds sections 2889.9 and 2890 to the P.U. Code respectively.

The only service of concern here is gas service that will be billed on the credit card company or bank statement. The credit card or bank statement should clearly identify the service as the SoCalGas bill.

SoCalGas will not permit BillMatrix to place any charges on SoCalGas' bills. The amount of the gas bill will appear on credit/debit card or bank statements as one of two distinct line items, one with SoCalGas' charges and one with BillMatrix's name and fee for making a card payment. BillMatrix is only able to charge an agreed upon transaction fee.

Customers using BillMatrix would direct service inquiries, relating to card payments, to BillMatrix. The customer could contact BillMatrix in three ways: 1) BillMatrix's toll-free customer service number will appear on the customer's credit card statement next to the vendor's name. 2) SoCalGas customer service representatives can provide customers with BillMatrix's toll-free customer service number. 3) Should the customer encounter a problem when making a card payment, the vendor's voice menu will provide the customer with BillMatrix's toll-free customer service phone number. SoCalGas will require BillMatrix to maintain adequate customer service resources to handle service inquiries. When a customer disputes a card payment, SoCalGas will require BillMatrix to research the transaction with the Credit Card Company or bank and provide details to the customer. If the details do not seem familiar, and the customer still wishes to dispute that they made the transaction, the dispute will become a charge-back, and the customer's card will be credited for the disputed bill amount.

The bill that the customer receives in the mail shows SoCalGas' toll-free number. We will require SoCalGas to provide a telephone number at the at the Commission where the consumer may register a complaint.

SoCalGas provides a means for expeditiously resolving subscriber disputes of charges that were not authorized. If the customer believes a charge is erroneous, BillMatrix will be required to research the transaction with the Credit Card Company or bank and provide details to the customer. If the details do not seem familiar and the customer still disputes the bill, the dispute becomes a charge-back and the customer's card will be credited for that amount. Fraudulent charges will be reversed and investigated by the credit card company such as Visa, American Express or Discover.

SoCalGas does not require a 30-day limit on resolving disputes. Since this is a one-year pilot, we will not require SoCalGas to impose such a limit at this time. The report at the end of the 12-month trial period shall include the number of billing disputes and the amount of time required to resolve each dispute. At that time we can consider the need for such a limit.

Outsourcing

SoCalGas' agreement with BillMatrix, does not permit outsourcing without SoCalGas' prior written consent, except in the case of a merger where the assets of BillMatrix are acquired by another party.

Conclusion

We will hold SoCalGas to the consumer protections advanced in this Resolution. We will approve advice letter 1262-E with the conditions listed above for 12 months. We will allow SoCalGas to file an advice letter at the end of 12 months for approval to continue its credit/debit card option. With that filing SoCalGas should include a report of any problems or customer complaints experienced with the credit/debit card payment option, the number of billing disputes, the amount of time required to resolve each dispute, the percentage of losses due to chargebacks, and the percentage of losses due to fraud.

We changed SoCalGas' proposed procedure to allow 2 additional months to file a report and to clarify the procedure at the end of the 12 month pilot program. SoCalGas was not clear in its advice letter what would happen at the end of the pilot program. If SoCalGas does not file an advice letter within 12 months, the service will terminate at 12 months. If SoCalGas does file an advice letter within 12 months, the service will be allowed to continue until the Commission issues a Resolution, which either continues the service, terminates the service, or modifies the service.