End of the road for cold-call energy doorstep sales – says consumer watchdog
Consumer Focus is calling on the energy industry to end cold-call doorstep sales. The call comes as new research from the watchdog shows that more than nine out of ten people who have bought energy products on the door would never do so again and only 4% of people are positive about energy door step sales.
Other key findings from the watchdog’s research included:
- Only 1% of consumers see doorstep sales as a useful way to find out about products
- Only 3% have a positive view of any type of doorstep sales, down from 9% in 2009.2
- 50% of those who sign up on the door for a product or service, and then changed their mind, signed up because they felt pressurised
- 79% of customers would prefer prior appointments agreed before a sales visit
SSE announced recently that it was suspending doorstep sales. The consumer watchdog hopes that this will encourage other firms to end cold-calling sales on the doorstep which can pressurise consumers into switching to a poor deal and will work with the industry to try and end this distrusted practice.
Mis-selling by doorstep energy sales agents has been an ongoing problem since retail energy competition was introduced. Currently four of the ‘Big Six’ suppliers are being investigated by Ofgem about whether their door-step sales practices have broken the rules. SSE has also recently been successfully prosecuted by Surrey Trading Standards for using a misleading sales script for doorstep energy sales.
Consumer Focus is warning that unless the energy industry ends unsolicited doorstep selling and works with the Government and regulator to tackle sale issues around smart meters and the Green Deal, mis-selling will continue and mistrust of energy companies will deepen. Poor sales practices may also damage consumer confidence in key Government schemes, including the Green Deal and the roll-out of smart meters.
The watchdog is calling for a whole new approach to protect consumers on the doorstep. Suppliers don’t usually offer their best deals face to face and the watchdog’s new research shows that more than four in ten people feel under pressure to buy on the doorstep. This can leave many switching to a worse deal – Ofgem has previously estimated up to half switch to a more expensive tariff.
Audrey Gallacher, Director of Energy at Consumer Focus, said:
‘The end of the road has been reached on cold-call energy doorstep sales. This industry has an appalling track record of mis-selling at people’s homes and has had over a decade to change.
‘Assurances from energy firms that they will get better simply aren’t good enough. Unless the problems with doorstep selling are tackled, and firm protections put in place, customers will continue to lose out. A pandora’s box of mis-selling could also be opened with the roll-out of smart meters. The energy industry must recognise it needs to change to stem the tide of distrust and anger that doorstep selling is causing.’
Steve Playle from the Trading Standards Institute said:
‘We share Consumer Focus’ concerns over unsolicited doorstep energy sales. Cold callers immediately put householders, particularly those that are vulnerable, on the back foot and they are more likely to succeed in making a sale.
‘Doorstep energy sales continue to generate many complaints, indeed Surrey Trading Standards has recently prosecuted one of the 'Big Six' for making misleading claims. Some of the energy retailers have been drinking in the last chance saloon for too long and sales practices now need to change. We encourage consumers to never buy on the doorstep - it is best to shop around and take time to consider before agreeing to anything.’
The need for greater protection on doorstep sales is even more urgent given the increase in energy sales expected from the nationwide roll-out of smart meters and the start of the Government’s Green Deal energy efficiency scheme. The roll-out of smart meters in particular will give energy suppliers unprecedented access to almost every home in the country. Consumer Focus has serious concerns about industry being allowed to conduct sales inside people’s homes, given their poor track record and that consumers may feel even more pressure to buy from sales agents in their homes than on the doorstep.
Consumer Focus is calling for new measures to protect consumers from doorstep mis-selling. The consumer champion is urging suppliers to take an immediate three-month moratorium on cold-calling to explore alternatives and if they are unwilling to change their practices after this period for Ofgem to consider an outright ban on doorstep sales.
The watchdog is asking the energy industry to make the following changes voluntarily and, if they do not, for Ofgem to legally require suppliers to take action. These measures include:
- An end to cold-call doorstep sales in the home by energy suppliers. Sales should only be made by pre-booked appointments and no sales should be allowed during smart meter installation.
- Customers should be clearly signposted to independent advice by suppliers ahead of any home sales visit and given details in any information left at the sale.
- Suppliers must required to inform consumers if there are cheaper deals on offer, such as cheaper online prices, in all face to face or telesales processes.
Notes to editors:
Consumer Focus’ research – ‘The end of the road ’ – can be found at the following link.
1. Face-to-face research of 1878 adults across Great Britain was conducted by TNS Omnibus on Consumer Focus’ behalf in May 2011. Only 4% of those surveyed said they had a positive view of doorstep selling by energy companies. 92% of people who have had a previous experience with an energy company doorstep agent said they wouldn’t buy any other energy related products on the door.
2. The 2009 research was carried out on 7th – 8th October by ICM for Consumer Focus. The survey was of 1008 people across Great Britain.
3. SSE is currently appealing this verdict.
4. Ofgem Probe 2008
To help consumers to decide which tariff and supplier is best for them, they can visit one of the price comparison websites accredited to the Consumer Focus Confidence Code. The code guarantees the site is independent and impartial, well managed with up-to-date data, helps you to find the best deal for you easily and includes information on the widest range of tariffs available. There are 13 accredited sites, nine of which also have a telephone service:
- BeatthatQuote.com: 0845 652 1546
- Energy Helpline: 0800 074 0745
- Energylinx: 0800 849 7077
- Moneysupermarket.com: 0845 345 1296
- Simply switch: 08000 111 395
- TheEnergyShop.com: 0845 330 7247
- UK Power: 0800 093 2447
- Uswitch: 0800 404 7908
- Which? Switch: 01992 822 867