Energy firms told to cease ‘Del Boy’ sales tactics and compensate customers

MPs condemn doorstep salesmen for pressurising consumers into signing up for unsuitable gas and electricity tariffs Energy companies should drop “Del Boy” style sales tricks and pay compensation to customers who were mis-sold gas and electricity contracts on the doorstep, a group of MPs said. In its report, the energy and climate change select committee said it was concerned that householders were being pressured by salesmen into switching suppliers and onto new deals which were no better, and sometimes worse, than their current tariff. Energy regulator Ofgem estimates that 40% of people who switch do not get a better deal. The committee said it seemed that vulnerable customers were being particularly targeted by salesmen, with Ofgem telling MPs that 70% of prepayment customers had been won on the doorstep Tim Yeo, chairman of the select committee, said: “There is mounting concern in parliament about the doorstep selling techniques of large energy companies. “If it turns out that consumers are being persuaded to switch contracts when it’s not in their best interests, by salespeople keen to earn commission, then it would only be right for the energy companies to cough up compensation.” Scottish and Southern Energy (SSE), one of the big six group of energy suppliers, recently suspended all its doorstep activity after being found guilty of two counts of mis-selling in a case brought by Surrey county council. SSE, which is appealing against the Surrey verdict, said the market had changed, with fewer people willing to engage with traditional doorstep sellers. The committee welcomed SSE’s decision and urged other energy companies to take action themselves without waiting for the government or Ofgem to act. Yeo said: “The rest of the big six should ditch the Del Boy sales tricks and concentrate on giving customers the information they need to choose the correct contract.” A spokesman for Ofgem said the select committee was right to highlight the issue of compensation for customers. He added: “Ofgem’s recent review of the retail market signalled that there may be a case for additional powers for the regulator to better protect and put right problems for consumers.” The select committee also said it is concerned over recent rises in energy prices, the growth in the complexity of tariffs and the dominance of the market by six big suppliers. Yeo said a lot of people were “simply bamboozled” by their bills, and that even the energy minister had admitted that he got confused when trying to switch. Consumer organisation Which? estimates that the number of tariffs available to energy customers has risen from 180 to 400 in the past 18 months, even though 99% of all domestic accounts have been held by the big six suppliers since 2008. The select committee criticised Scottish Power for the way it structured increases in gas and electricity tariffs announced in June, saying those who used least energy would be hardest hit. Consumer groups welcomed the MPs’ report. Mike O’Connor, chief executive of Consumer Focus, said: “Cold calling on the doorstep should end now. “Organised confusion, pressured selling, misleading information – no market should be able to operate like that, and especially not one that provides an essential product that is getting more and more expensive.” He added that Ofgem needs to take a firm grip on the market and “set it on the right course for the enormous changes we will all face”. Energy bills Consumer affairs Household bills Consumer rights Utilities Energy industry Scottish and Southern Energy Hilary Osborne guardian.co.uk

Posted by on July 25, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.