'Del Boy' energy sellers feel the heat from Government

The Government says energy companies should compensate customers who have been mis-sold energy tariffs by dodgy doorstep salesmen.

by Emma Haslett
Last Updated: 25 Jul 2011
There aren’t many consumers about at the moment who feel much of a sense of loyalty toward their energy providers. So we wouldn’t imagine that they’ll get much in the way of sympathy over the Government’s latest decree that energy companies should pay out compensation to consumers who feel that they’ve been mis-sold tariffs on the doorstep. Still: is this really the best way for the Government to get at energy companies?

The figures certainly don’t swing in energy providers’ favour: according to statistics read out by the Energy and Climate Change Committee, 40% of people who have been persuaded by doorstep sellers to switch their tariffs haven’t ended up better off. And, according to lobby group Consumer Focus (which obviously has a bit of a vested interest), 92% of those who’ve had an experience with a ‘doorstep agent’ from an energy company wouldn’t do it again. Likewise, only 1% thought doorstep selling was a ‘useful way’ of finding out about products. So Committee Chairman Tim Yeo’s assertion that energy firms are using ‘Del Boy’ sales tricks wasn’t entirely without justification.

But to be fair to energy providers, they’ve already introduced measures to prevent this sort of thing from happening. In fact, Scottish Southern Energy has already closed its doorstep selling arm: back in May, Surrey Trading Standards fined it after its salesmen were found to be using ‘deliberately misleading’ sales material to bamboozle customers. As a result, as industry body Energy UK points out, the rules around doorstep selling have become ‘tighter than ever’: sales people are now required by energy regulator Ofgem to provide their customers with quotes showing exactly what their savings will be. And while door-to-door selling might seem out-dated, for many consumers who haven’t quite made it online, it’s still the best way to spread the word about which tariffs are available.

So in many ways, this is a case of the Government shutting the door after the horse has bolted. It’s ramping up the pressure on an industry which is already battling higher wholesale prices, political demands to invest more in green energy, and the North Sea Windfall tax, which the Government expects to bring in £2bn. So the chances are that the brunt of the cost of compensation will be shouldered by consumers. With that taken into account, it could be argued that there’s a touch of political point-scoring going on here…

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