For whom the doorbell tolls
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The government should call time on selling gas and electricity on the doorstep.
Following a long-running investigation into the UK energy market, the regulator Ofgem has now announced a set of reforms aimed at ending unfair practices in the marketplace.
The main thrust of the proposed reforms aims to raise the standards of doorstep selling of gas and electricity – instead of banning this practice outright.
So how does doorstep selling work and why has it become so discredited?
Each energy supplier employs a large salesforce dedicated to the task of knocking on doors - some in excess of 1,000. Agents tend to work within regional teams and travel from town to town to sell their supplier’s energy tariffs. What happens once they arrive on your door is well known - the bell rings and for those of us brave enough to open, promises of often unrealistic savings soon follow.
Ofgem’s reform is trying to address the fact that doorsteppers currently need not conclusively prove that switching is going to produce a financial benefit. In many well-documented cases, customers have been switched onto wholly inappropriate tariffs. The only beneficiaries from these transactions would have been the suppliers, and of course the doorknockers themselves who earn per sale commissions of up to £50.
From 18th of January next year therefore, Ofgem will require that doorsteppers issue written quotes to their prospective customers first, before processing a switch. When the customer does not know enough about their current supply details to create an accurate savings quotation, the doorstepper will not be allowed to switch the customer’s supply at all.
Ofgem’s move is significant. About 50% of UK energy switches are transacted on the doorstep – a staggering 3 million gas and electricity switches in all per year – and it is time that these customers get some protection. But unfortunately, it is all too easy to foresee how these new regulations can be undermined. Quotes could be manipulated to generate false results, perhaps even with relative ease.
The only thing to permanently deter mis-selling practices would be to record the conversation between sales agent and customer – as is common practice in the call centre industry. And since this cannot feasibly be done on the doorstep, should it now not be time to simply ban doorstep selling of gas and electricity once and for all? All we would be doing by outlawing this already thoroughly discredited and intrusive sales practice is to go back to the days before energy deregulation - when there practically was no doorstep selling activity anywhere. Who would miss it?
And here is what you should remember if you ever have a doorstep sales agent on your door.
1) The doorstepper has usually only one tariff to sell to you, and he is financially incentivised to do so. But you should know that there are more than 14,000 energy tariffs to choose from across the UK. It is highly unlikely that the person talking to you has the best offer for you.
2) The best way to switch your gas and electricity is to do it yourself, using the Internet and a reputable online energy comparison service like the quick and easy service offered here.
3) Switching over the phone is the second-best option, simply because the conversation will be recorded. Remember to write down the time of the call, and the name of the agent – this will help should a complaint arise later.
Florian Ritzmann is Product Director at online comparison service Xelector.com, and has been working in the energy industry for over 10 years.
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