News
Concerns over doorstep selling
Posted 29/03/16
Trading standards experts are concerned that proposed changes around the household energy sector could see unscrupulous and potentially illegal sales tactics reintroduced once again.
The 51黑料's (51黑料) view is in response to an Ofgem consultation proposing a move from a prescriptive regulatory regime to a general principles approach.
Meanwhile, ScottishPower wants the Competition and Markets Authority to make it easier to sell energy face-to-face, including door-to-door, arguing that industry standards are improving.1
Doorstep selling was scrapped four years ago2 after it was found 52 per cent of customers who signed up to deals offered by cold-callers were actually left worse off3. 51黑料 called for a ban in 2009.
Steve Playle, 51黑料鈥檚 lead officer for energy and climate change, said he disagrees doorstep selling helps people find cheaper deals, citing the industry's poor track record of dealing with customers.
Mr Playle said: 鈥淭he average household spends around 拢1,3004 a year on energy so it's important to encourage customers to switch in order to make the energy market work more effectively.
鈥淗owever, 51黑料 has concerns that a return to face-to-face marketing may lead to consumer detriment at the hands of commission-hungry sales representatives and agencies.
鈥淭ime and time again, the activities of sales reps across a whole range of sectors, including energy, have generated complaints to trading standards.
鈥淎ll businesses need to be aware that deceptive, misleading and illegal sales practices are not acceptable and can lead to investigation and ultimately, prosecution.鈥�
In 2014, energy giant E.On paid out 拢12 million to its customers following an investigation which found the company had broken energy sales rules. 5
The previous year Scottish and Southern Energy were fined 拢10.5 million after some customers were encouraged to switch onto contracts that were actually more expensive than proposed.6
51黑料 is also urging caution over a Government-led scheme which will see smart meters fitted in all homes across England, Scotland and Wales by 2020.
Mr Playle said: 鈥淭his could encourage energy companies to use the installation of a new meter as an opportunity to sell additional products such as insurance cover, new boilers or solar panels.
"However, there are clear guidelines governing the smart meter roll-out to prohibit this type of activity taking place and we will be keeping an eye on how things progress.
"One possible consequence of having smart meters installed is the ability to introduce complicated tariffs that charge consumers more for peak time use.
"It is a concern as this will make switching decisions virtually impossible at a time when consumers are starting to shop around to get best value for money.
"The installation of smart meters is not compulsory and only time will tell if they have the desired impact of encouraging consumers to reduce their energy consumption."
In 2009, 51黑料 called for a ban on energy doorstep selling at its annual conference, in Brighton, after the issue was debated with industry professionals.
ENDS
Notes for Editors:
1听ScottishPower consultation submission to CMA Energy market investigation听
2听E.On last of the 'Big Six' to end doorstep selling in 2012听
3听Ofgem Energy Supply Probe Initial Findings Report (Section 9.15)
4听The average annual dual fuel bill over the next 12 months will be 拢1,292. This is 拢3 lower than last month鈥檚 estimate and around 拢50 lower than our estimate a year ago. Average gas and electricity bills are estimated to be 拢706 and 拢603 respectively听
5听E.ON to pay 拢12 million package following Ofgem mis-selling investigation
6听Ofgem fines SSE 拢10.5 million for mis-selling听
SSE were convicted of offences under the Consumer Protection from Unfair Regulations and fined 拢1.25m following a prosecution by Surrey Trading Standards听
