Problems with companies who mis-sell energy on the

doorstep

Energy Policy into Practice: slides for advisers

What’s the issue?

• Doorstep mis selling has been a big issue for many years – complaints peaked at over 1000 a month in 2002

• Complaint numbers have fallen but mis selling is still a big issue for consumers, causing detriment and undermining confidence.

• Ofgem research in 2008 found that over half of consumers switched to a more expensive deal after a doorstep sale

• Consumer Focus research in 2009 found that 34% of consumers who had experienced energy doorstep sales found it intimidating

• 2010 Ofgem introduced a new license condition (SLC 25) aimed at ending doorstep mis selling

• September 2010 – Ofgem announce an investigation into four energy suppliers for potential breaches of this license

Who says what?

“If better advice for customers and enforcement of the tougher rules doesn’t end the flagrant abuse of this form of selling the big question will be whether it should be completely banned”Consumer Focus response to Ofgem announcement to investigate four energy suppliers for mis selling, September 2010

“given the prominence of telesales and face-to-face sales as a means of switching it is important that consumers are sufficiently well informed that they feel able to take correct decisions”

Ofgem, Retail Market Review , March 2011

“We must put a stop to consumers finding themselves intimidated or misled into switching energy providers only to end up paying higher or duplicate bills for months on end - “there is now only one real solution - banning energy doorstep selling altogether.”

Trading Standards Institute, 2009

“The introduction of the Code and the EnergySure Scheme has delivered major improvements in doorstep selling practices in the last six years.The industry is working hard to stamp out all rogue traders while encouraging best practice and high standards in energy selling practices.”

The Energy Retail Association, Introduction to the energysure code of practice for face to face sales

The consumer experience

Current Common mis selling complaints:• Agents taking advantage of the vulnerable, including the elderly and

the infirm• Agents making reference to Ofgem/the Govt in a way that suggests

official support for statements• Agents suggesting to consumers that they can save money

because their company is the DNO for a region• Agents ignoring No Cold Calling Zones and claim they are not

selling• Agents gaining access to a premise on the pretext of needing to

take a meter reading

The Future• The roll out of Smart Meters and the Green Deal could allow new

types of mis selling to occur

Policy challenges?

• Outcome of the Ofgem investigation of four energy suppliers for potential breaches of SLC 25

• Potential guidance on the Consumer Protection from Unfair Trading Regulations for the energy sector

• Go live of the smart meter roll out – 2012• Launch of the Green Deal - 2012

Want more information?

• Consumers who have experienced mis selling on the doorstep should call Consumer Direct on 0845 4 04 05 06

• Energysure code – the industry voluntary code of practice http://www.energy-retail.org.uk/salespractice.html

• Consumer Focus advice on switching energy supplier http://www.consumerfocus.org.uk/get-advice/energy/advice-leaflets