Utility Doorstep Mis-Selling

Door StopBritain’s big utilities should cease to use “Del Boy” selling tactics and voluntarily refund customers mis-sold energy contracts, a committee of MPs has demanded.

Four of the six biggest energy suppliers are under investigation by Ofgem, the regulator, for allegedly breaking trading regulations. One, Scottish and Southern Energy, was convicted in May for signing up customers on the doorstep using a “misleading” script. The supplier has filed an appeal and has become the first utility to stop using door-to-door sales agents.

The energy select committee will release a report on Monday that welcomes SSE’s decision. But the MPs note: “With the retention of doorstep selling by the other major suppliers, consumers may be pressured into switching supplier on the doorstep without proper consideration.” The committee stops short of calling for an immediate end to doorstep selling but urges the utilities to refund customers who might have been persuaded to sign up for an overly expensive tariff.

Tim Yeo, the Conservative MP who chairs the committee, said: “There is mounting concern in parliament about the doorstep selling techniques of large energy companies. 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,” he said.

The committee urges energy companies to compensate any victims of mis-selling without waiting to be forced. “The possibility that a large number of consumers may have paid too much for their electricity or gas because of mis-selling on the doorstep should be examined at once and compensation paid where consumers have been misled,” the report says.

Utility companies are under greater political pressure than usual following a series of bill increases announced by Scottish Power, British Gas and SSE. Chris Huhne, the energy secretary, has published a white paper designed to unlock £200bn of investment in Britain’s energy infrastructure over the next decade with the twin aims of cutting carbon emissions and replacing lost generating capacity.

The cost will lead to higher charges for consumers, say analysts. Privately, energy company executives worry that politicians are blaming them for higher bills – and for the excesses of some door-to-door sales agents – instead of preparing the public for the burden of the investment that the government believes is necessary.

In a report entitled Rethinking the Unaffordable, KPMG, the consultancy, urged the government to reassess its ambitions. “It is certain that the consumer will feel the bite in their pocket to help repay such massive capital expenditure,” said Mark Powell, head ofUK utilities at KPMG. “We must debate the method and costs – theUK and its consumers can’t afford not to.”

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

CommentLuv badge