Four of the "big six" UK energy suppliers are to be investigated amid
concerns of mis-selling to customers, the regulator has announced. Npower, Scottish Power, Scottish and Southern Energy, and EDF Energy all
face questions over face-to-face and telephone sales of energy contracts. Ofgem said it had received information from a variety of sources suggesting
they could have breached new rules. The quartet said they would work with Ofgem on the investigation. Rules Research by the regulator in 2008 found that, of those who switched their
energy supplier, more than half did so in response to contact with a
salesman. But it found that many who switched following doorstep sales ended up on a
more expensive tariff because they were misled, or found it difficult to
compare bills. As a result, Ofgem brought in new regulations at the end of last year aimed
at tightening up the sales process. The new requirements included: * supplying a customer with an estimate before any face-to-face sales
are concluded
* giving, in most cases, a comparison between the new offer and the
customer's current deal
* actively preventing mis-selling to customers on the doorstep and
over the telephone. The four energy companies face an investigation into whether these new
licence agreements have been breached. "We expect all suppliers to comply with these tougher obligations, but if
our investigations find otherwise, we will take strong action," said Andrew
Wright, of Ofgem. The regulator has the power to fine a company up to 10% of its turnover if a
breach is discovered. Previously, under the preceding misselling rules, Ofgem fined Npower £1.8m
in 2008. London Electricity - now part of EDF Energy - was fined £2m in
2002. Reaction Views expressed by the four energy companies suggest they will vigorously
refute any claims of mis-selling. David Mannering, the corporate economic regulation director at Npower, said:
"We fully support Ofgem in making sure that customers clearly understand the
products on offer to them and we are confident that the processes we have in
place mean that we comply with our regulatory obligations." Scottish Power has the highest proportion of complaints per 100,000
customers made to advice line Consumer Direct this year. However, not all of
these complaints are necessarily justified, as they are just the view of the
consumer. Its spokesman said the company would answer questions raised by Ofgem. "Scottish Power insists on the highest standards possible for all of our
sales agents, and invests heavily in training and development to maintain
these standards," he said. EDF Energy said that it believed it was fully compliant with the rules, and
trained its staff fully, including refresher briefings. All new sales were
verified by telephone to confirm the customer's intention to switch. And SSE said it believed it was complying with the new rules. "As a responsible company we take seriously all our customers' issues and
would ask any prospective or existing customer to contact us if they are
concerned, and we will work with them to resolve the situation," SSE said. Christine McGourty, director of Energy UK, which represents the leading gas
and electricity companies, said: "The companies involved will collaborate
fully with the Ofgem investigation and are awaiting further details from the
regulator. "The new regulations that cover doorstep selling are part of the industry's
EnergySure Code of Practice and members undergo a rigorous independent
annual audit to ensure all the obligations are being met. "Any sales agent in breach of the code will be struck off the approved
energy sales register. Companies take their customers' concerns seriously
and would urge customers to call them directly with any concerns they have." Helpline Meanwhile, Ofgem is urging any householders who believe they have been
mis-sold energy on the doorstep or on the telephone to report the case to
the Consumer Direct hotline by calling 08454 040506 and choosing option one. However, the current system still encourages mis-selling, according to
Audrey Gallacher, of watchdog Consumer Focus. "Complaints have declined since new rules came into effect this year, but
suppliers still seem to be flouting the rules," she said. "Some customers are still being given misleading quotes and information,
which leave them worse off when they switch provider. "While many doorstep sales people will do a good job, the pay and rewards
system continues to encourage mis-selling, despite years of regulation and
voluntary initiatives. "If better advice for customers and enforcement of the tougher rules doesn't
end the flagrant abuse of this form of selling, the big question will be
whether it should be completely banned." http://www.bbc.co.uk/news/business-11150541
concerns of mis-selling to customers, the regulator has announced. Npower, Scottish Power, Scottish and Southern Energy, and EDF Energy all
face questions over face-to-face and telephone sales of energy contracts. Ofgem said it had received information from a variety of sources suggesting
they could have breached new rules. The quartet said they would work with Ofgem on the investigation. Rules Research by the regulator in 2008 found that, of those who switched their
energy supplier, more than half did so in response to contact with a
salesman. But it found that many who switched following doorstep sales ended up on a
more expensive tariff because they were misled, or found it difficult to
compare bills. As a result, Ofgem brought in new regulations at the end of last year aimed
at tightening up the sales process. The new requirements included: * supplying a customer with an estimate before any face-to-face sales
are concluded
* giving, in most cases, a comparison between the new offer and the
customer's current deal
* actively preventing mis-selling to customers on the doorstep and
over the telephone. The four energy companies face an investigation into whether these new
licence agreements have been breached. "We expect all suppliers to comply with these tougher obligations, but if
our investigations find otherwise, we will take strong action," said Andrew
Wright, of Ofgem. The regulator has the power to fine a company up to 10% of its turnover if a
breach is discovered. Previously, under the preceding misselling rules, Ofgem fined Npower £1.8m
in 2008. London Electricity - now part of EDF Energy - was fined £2m in
2002. Reaction Views expressed by the four energy companies suggest they will vigorously
refute any claims of mis-selling. David Mannering, the corporate economic regulation director at Npower, said:
"We fully support Ofgem in making sure that customers clearly understand the
products on offer to them and we are confident that the processes we have in
place mean that we comply with our regulatory obligations." Scottish Power has the highest proportion of complaints per 100,000
customers made to advice line Consumer Direct this year. However, not all of
these complaints are necessarily justified, as they are just the view of the
consumer. Its spokesman said the company would answer questions raised by Ofgem. "Scottish Power insists on the highest standards possible for all of our
sales agents, and invests heavily in training and development to maintain
these standards," he said. EDF Energy said that it believed it was fully compliant with the rules, and
trained its staff fully, including refresher briefings. All new sales were
verified by telephone to confirm the customer's intention to switch. And SSE said it believed it was complying with the new rules. "As a responsible company we take seriously all our customers' issues and
would ask any prospective or existing customer to contact us if they are
concerned, and we will work with them to resolve the situation," SSE said. Christine McGourty, director of Energy UK, which represents the leading gas
and electricity companies, said: "The companies involved will collaborate
fully with the Ofgem investigation and are awaiting further details from the
regulator. "The new regulations that cover doorstep selling are part of the industry's
EnergySure Code of Practice and members undergo a rigorous independent
annual audit to ensure all the obligations are being met. "Any sales agent in breach of the code will be struck off the approved
energy sales register. Companies take their customers' concerns seriously
and would urge customers to call them directly with any concerns they have." Helpline Meanwhile, Ofgem is urging any householders who believe they have been
mis-sold energy on the doorstep or on the telephone to report the case to
the Consumer Direct hotline by calling 08454 040506 and choosing option one. However, the current system still encourages mis-selling, according to
Audrey Gallacher, of watchdog Consumer Focus. "Complaints have declined since new rules came into effect this year, but
suppliers still seem to be flouting the rules," she said. "Some customers are still being given misleading quotes and information,
which leave them worse off when they switch provider. "While many doorstep sales people will do a good job, the pay and rewards
system continues to encourage mis-selling, despite years of regulation and
voluntary initiatives. "If better advice for customers and enforcement of the tougher rules doesn't
end the flagrant abuse of this form of selling, the big question will be
whether it should be completely banned." http://www.bbc.co.uk/news/business-11150541
No comments:
Post a Comment