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New rules will protect power firm customers from pushy salesmen
Jonathan Prynn23 Mar 2009
TOUGH new rules to stop consumers being steamrollered into switching energy supplier by unscrupulous doorstep salesmen were unveiled today.
They are designed to prevent mis-selling of gas and electricity, a practice that has regularly shamed the energy industry since competition between suppliers was introduced in the late Nineties.
Many of the worst examples of the practice, which sees sales teams target vulnerable customers such as the elderly, have been seen in London.
The new package of measures from energy watchdog Ofgem was welcomed by consumer groups. It includes:
l A requirement to give customers a standard annual statement giving the tariff name, the level of energy consumption and a reminder of the right to switch supplier.
l A new simplified price "score card" to make it easier to compare complex energy tariffs.
l A need to provide written quotations to customers after a doorstep sale has been agreed.
l The introduction of a new "standard of conduct" for sales teams so that customers are not sold products or services "that they do not fully understand or that is inappropriate for their needs and circumstances".
The new rules, expected to be introduced this year, will carry the force of heavy sanctions, including fines that can be up to 10 per cent of the wrong-doing supplier's turnover.
Today's announcement includes a ban on "unjustifiable pricing" that requires any price differences to be "objectively justifiable on cost or other grounds".
This will stop the practice of charging higher tariffs for incumbent customers who have never switched supplier compared with lower "carrot" prices to attract new customers.
However, Ofgem has stopped short of ordering a further investigation of allegations of illegal collusion between the "big six" suppliers - British Gas, EdF, Eon, Npower, Scottish Power and Scottish and Southern Energy - as it claims it has found no evidence of a cartel.
Ofgem chief executive Alistair Buchanan said: "Our undue discrimination rules will address the symptoms of flaws in the market, while our retail market measures will treat the causes.
"This is an emphatic move by Ofgem to clear the decks of obstacles that prevent consumers from getting access to the best offers."
Anne Robinson, director of consumer policy at price comparison website uSwitch, said: "This is fantastic, we've been asking for this for 10 years, it puts consumers in control.
"The big hope now is that it will give more vulnerable people the confidence to switch for the first time."
Reader views (5)
Simple way to protect consumers: if a supplier has been switched by deception or forgery (which is what happened to me) then there is no valid contract and all the energy supplied can't be charged for.
- Roy, England, 24/03/2009 10:46
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This has gone on for years. I suspect it will be too little too late. These 'salesmen', or is it 'conmen', will only back off if suitable penalties like a £10,000 fine or three months imprisionment are introduced!
- Michael, London, 23/03/2009 17:50
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But will these unscrupulous companies and their pushy cold-calling doorstoppers take any notice of the new rules when there their wages (commision) are involved?
- Keith Price, Luton, England, 23/03/2009 15:56
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If the rules are being regulated by OFCOM,FSA,FOS or any other so called 'Official Regulators' forget it, they are just a waste of tax payers money with no bite when it comes to the crunch.
- Mike, London England, 23/03/2009 15:28
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Just one question: When are gas and electricity bills going to come down, following significant reductions in wholesale prices?!
- Adam, London, UK, 23/03/2009 13:37
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