Case Study

Administering an Assurance of Discontinuancefor Energy Service Companies
In the past several decades, the retail supply of electricity and natural gas has been
deregulated in many states. While public utilities continue to own the energy delivery
infrastructure, a third-party company can apply to become an energy service company
that sells retail energy to customers.
The business practices of energy service companies
are governed and regulated by each state. If a privateenergy service company violates a state’s businesspractice regulations, the Office of the Attorney Generalcan institute civil proceedings against the company
to enforce the state’s laws. Such civil proceedings canbe resolved through an Assurance of Discontinuance(AOD). In an AOD, the energy service company agrees
to modify its business practices and often makes a
restitution payment to the state. Kroll has been selectedby various states’ attorneys general to administer thedistribution of these energy service company restitution
payments to consumers.

The Challenge
Kroll’s foremost goal when administering an AOD is
to distribute as much of the restitution fund as possible
to consumers. In these cases, Kroll receives consumer
data that comes from an energy service company’s
customer data, containing both current and former
customers’ full addresses, service addresses andutility account numbers. These customer addresses
are frequently rental addresses and hence thesecustomers tend to be more transient. In addition, theseformer customer records are often more than 10 years
old. Attorneys General add each consumer’s payment
amount to the energy service company’s data before
the data is transferred to Kroll.

Kroll’s Solution
Understanding the importance of distributing as many
restitution dollars as possible to consumers, Kroll builds
an informational website and sets up a toll-free phone
number, staffed with Kroll’s live operators prior to any
direct outreach to consumers.
Before mailing any restitution checks, Kroll recommends
mailing a one-page letter notice that briefly describes
the Attorney General’s enforcement action and sets
forth the amount of each consumer’s payment. The
notice also tells consumers the date on which Kroll will
mail the restitution checks. This allows consumers tocontact Kroll via our website or use the toll-free number
to speak to our live operators with any questions about
the enforcement action, the notice or their payment. The
notice envelope and the notice itself both contain theAttorney General’s color logo. The Attorney General’s
official full-color logo adds legitimacy to the notice. To
further enhance the credibility of the notice, it contains
links to both the Attorney General’s AOD website andKroll’s AOD website.
In some instances, energy service company’s customer
data will include email addresses, in which case Kroll will
also send email notices in addition to the mailed notices.
Since these energy service consumer lists often containolder addresses, mailing notices prior to mailing checks
allows Kroll to learn via returned undeliverable notices
which addresses are no longer valid. In some energy
service company AOD administrations, undeliverable
notices have exceeded 20% of the initial notice mailing.
Additionally, an initial notice mailing allows Kroll toaddress-trace all returned undeliverable notices andupdate consumers’ mail addresses in Kroll’s databaseprior to Kroll mailing consumers their restitution checks.

The restitution checks are mailed with an explanatory
cover letter, and both the envelope and cover letter containthe Attorney General’s official full-color logo. Approximately
60 days after mailing the cover letters and checks,
Kroll mails check cashing reminder postcards and sends
check cashing reminder emails, if email addresses areavailable, to all those consumers who have not yet
cashed their checks.
Despite these efforts, many consumers’ restitution
checks will remain uncashed. Attorneys General have
handled uncashed check funds differently. In some AOD
administrations, uncashed check funds are redistributed
in a second distribution to the consumers who cashedtheir original checks.
In another energy service company AOD administration,
Kroll completed four distributions in aggregate amounts
that corresponded with the energy service company’s
four restitution payments spread over a 19-monthperiod. Uncashed check funds from the first three
distributions were rolled into the fourth distribution.
Regardless of how uncashed checks are handled,
the goal remains to distribute as much of the restitution
fund as possible to consumers.

The Impact
As a result of these robust outreach efforts, Kroll has
been able to successfully distribute over 90% of energy
service company AOD restitution funds to consumers.

Contact
kroll.com/settlement-administration+1 844 777 8055

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