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Smart meters could open Pandora's box

Installations could allow salespeople with a history of mis-selling into homes, warn consumer groups

Julian Knight
Sunday 10 July 2011 00:00 BST

A plan to install a new type of "smart" energy meter in every home in the UK by 2019 could lead to widespread mis-selling by the big six gas and electricity companies, consumer groups have exclusively warned The Independent on Sunday.

The Government-sanctioned plan will see up to 53 million old gas and electricity meters swapped for new smart meters which calculate and display the amount and cost of the energy being used. The idea of the £11bn project is that people seeing how much energy appliances are costing will change their behaviour and make cutbacks.

However, consumer group Which? say they are very concerned that the big six energy firms are gearing up to use the nationwide installation programme as a way to sell expensive gadgets and get customers to sign up to different and potentially costly tariffs. What is more, Which? said that many Britons would be shocked that installers could come into their home and then focus on selling products and services.

A survey of 2,000 adults conducted by Which? found that 93 per cent would not let an energy company salesperson into their home; however, from later this year that is precisely what they will be doing: "It would be very wrong if energy companies to use the installation of smart meters as a way to get a foot in the door for their salespeople.

"Most consumers wouldn't want an energy salesperson calling on the phone or at the door never mind being allowed into their home for an hour or more while an installation takes place," said Jenny Driscoll, the head of campaigns at Which?.

Which? is calling on energy firms to sign up to its "just install don't sell" commitment over smart metering. To date only smaller providers such as First Utility, Ovo and the Co-operative have signed up to this code, the big six - which control more than 90 per cent of the market - have refused to do so. "It's an early stage in the process but we need to act now to prevent this turning into yet another energy mis-selling scandal," Ms Driscoll added.

But it already seems that providers are incentivising staff to sell products at the time of smart meter installation. For instance a job advert for "smart energy experts" by British Gas owner Centrica is promising bumper commissions for installation staff meeting "on target earning bonus".

Government watchdog Consumer Focus condemns any move to incentivise installers to sell.

"Sales of energy products and services during the installation of smart meters could open a Pandora's box of mis-selling. The smart meter roll-out will give energy suppliers unprecedented access to almost every home in the country. Sales during installation would blur the lines between commercial activity and this national Government scheme," said Zoe McLeod of Consumer Focus.

The big six energy companies have, according to Consumer Focus, an "appalling track record" over mis-selling to customers. In the past the industry regulator Ofgem has fined providers and their representatives for a variety of misdemeanours such as mis-representing costs and signing up customers without their knowledge. On Friday, Scottish & Southern Energy announced it was suspending its doorstep selling operation.

Smaller suppliers are also concerned that the installation of smart meters will lead to another round of mis-selling. "It is already a very confusing marketplace out there," said Hannah Derby, the head of marketing at First Utility.

"Smart metering is supposed to ease the situation by letting customers properly gauge their energy usage and select the appropriate tariff from a supplier. However, how are people supposed to do that if on installation they are sold to?"

Following massive price rises by British Gas on Friday and last month by Scottish Power, the gas and electricity industry is under scrutiny like never before. Ofgem is currently investigating pricing and says that it will not tolerate the roll-out of smart meters leading to yet another round of mis-selling.

"We would condemn the use of any selling approach or practice during the installation visit that undermined customer trust. The Government's position is clear: no consumer should be sold to without having agreed to this in advance," a spokesman said.

In response, Christine McGourty, the director of Energy UK, which represents energy suppliers, said it was working on a code of practice for the installation of smart meters which should safeguard against unwanted sales approaches. "If customers have given consent, any sales activities will be conducted in a fair, transparent, appropriate and professional manner," she said. "This will allow interested customers to understand and sign up to services at the visit if they want to do so, while at the same time protecting them from unwanted sales."

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