Changes to the household energy sector could cause a rise in deceptive sales tactics – including doorstep selling – forcing customers into more expensive contracts, a trading standards expert warns.
The Chartered Trading Standards Institute (CTSI) says Government regulator Ofgem’s recent proposals to relax rules could lead to unscrupulous sales methods.
They claim doorstop selling could increase, amid ScottishPower’s calls on the Government to make it easier to sell energy face-to-face.
The ’Big Six’ energy companies scrapped doorstepping four years ago after Ofgem found 52% of customers who signed up to cold-calling offers were left worse off.
Steve Playle, CTSI’s lead officer for energy and climate change, said: “A return to face-to-face marketing may lead to consumer detriment at the hands of commission-hungry sales representatives and agencies.
“Time and time again, the activities of sales reps across a whole range of sectors, including energy, have generated complaints to trading standards.
“All businesses need to be aware that deceptive, misleading and illegal sales practices are not acceptable and can lead to investigation and ultimately, prosecution.”
In 2014, energy giant E.On paid out £12 million to customers after the company were found to have broken energy sales rules.
The previous year, Scottish and Southern Energy were fined £10.5 million after some customers were encouraged to switch onto contracts more expensive than initially proposed.
Following the announcement of a Government-led scheme to fit smart meters in all homes across England, Scotland and Wales by 2020, CTSI also warned meters could enable energy companies to introduce complicated and expensive contracts.
Mr Playle said the installation of new meters could encourage businesses to sell additional products such as insurance cover or new boilers. It could also lead to a change in tariffs, he said, adding: “One possible consequence of having smart meters installed is the ability to introduce complicated tariffs that charge consumers more for peak time use.
“It is a concern as this will make switching decisions virtually impossible at a time when consumers are starting to shop around to get best value for money.
“The installation of smart meters is not compulsory and only time will tell if they have the desired impact of encouraging consumers to reduce their energy consumption.”
An Ofgem spokesman said: “Energy companies must treat you fairly when selling energy.
“This principle is enshrined in our proposals to ensure consumer protection keeps pace with the speed of change in the energy market, while also allowing energy companies the space to innovate and create a more competitive market.
“Failure to sell energy fairly would result in much higher fines under a tougher penalty regime we brought in last year.”