MPs criticise energy firms for pushy doorstep-sales tactics
Andrew Grice has been Political Editor of The Independent since 1998. He was previously Political Editor of The Sunday Times, where he worked for 10 years, and he has been a Westminster-based journalist since 1982. His column, Inside Politics, appears in The Independent each Saturday.
Monday 25 July 2011
Energy companies are using "Del Boy" doorstep-sales techniques to pressurise consumers to switch their gas or electricity provider, with some door-to-door salesmen earning more than half of their pay through commission, according to MPs.
The all-party Commons Energy and Climate Change Select Committee claims to have been appalled by the behaviour of some of the power companies' doorstep sellers, and says that householders are confused by a vast array of tariffs. The number of different rates has risen from 180 to almost 400 in the past 18 months.
In a report published today, the committee said gas and electricity firms should pay compensation to consumers who were the victims of mis-selling. It urged the companies to put their own house in order without waiting for the industry's regulator, Ofgem, or the Government to act.
"We are worried that a lot of people are simply bamboozled by their bills and the vast array of different tariffs on offer," said Tim Yeo, the committee's Tory chairman.
He welcomed the decision by Scottish and Southern – one of the so-called "Big Six" energy companies – to suspend doorstep sales, adding: "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."
The MPs added: "The level of tariff complexity that confronts consumers is unacceptable and the continued blight of mis-selling should have been taken in hand years ago. 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 by agents acting for the suppliers."
According to consumer groups, nine out of 10 people who have bought energy products on their doorstep say they would never do so again. Ofgem believes that up to 40 per cent of people who switch do not end up with a better deal.
The MPs also expressed concern that energy price "rise like a rocket and fall like a feather". They singled out Scottish Power for criticism, saying that customers who use the least energy will be hit hardest, and said the dominance of the "Big Six" required intervention by the Government and Ofgem.
Last week, Scottish and Southern became the third major supplier to raise prices this year when it announced an 18 per cent rise in gas prices and an 11 per cent increase in electricity charges. Two others, Eon and Npower, are reported to be planning steep rises.
Last night the Consumer Focus watchdog called for an immediate end to cold calling on the doorstep. "Organised confusion, pressured selling, misleading information – no market should be able to operate like that, and especially not one that provides an essential product," said Mike O'Connor, its chief executive. "Suppliers must stop cold-call sales and find an alternative that works for its customers."
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