Fed Up Consumers Slam Door on Energy Salesmen

Released on: September 25, 2009, 6:40 am
Author: uSwitch.com
Industry: Energy

uSwitch.com, the independent price comparison and switching service, is calling on industry regulator Ofgem to bring out tougher rules and regulations to govern energy doorstep and direct salesmen, after new research revealed that their sales tactics are leaving people feeling pressured, intimidated and on the wrong energy plan for their needs.

According to the research, almost 7 million UK households have taken out an energy plan on their doorstep or through a direct salesperson. However, less than a quarter of people who have done so (22%) believe they got a good deal. Of these, only 6% said that it reduced their bills significantly while just 16% said that they were very pleased with the deal they took up. On the flip side, 17% found that their new deal cost them more money than the one they switched from and almost a quarter (22%) said that they could have done better elsewhere.

Over four in ten people (44%) think that direct sellers on their doorstep, high street, at the local supermarket and on the phone are a nuisance. But for some consumers it crosses the line into something altogether more sinister with 22% finding salespeople intimidating and 59% finding the process too pressured, preferring time to think and make their own mind up.

More than a third of people (37%) think that salespeople don't present them with enough information to make an informed choice, while almost half (45%) don't like the fact that salespeople only represent one energy supplier - they would prefer to know what all the companies are offering instead.

As a result of growing unease and, in some cases, outright distrust, 82% of consumers would not buy directly from a salesperson. Almost a third (32%) would like to see tighter regulation, but over half (53%) would like to see the practice banned. Despite the fact that many elderly and vulnerable customers prefer to buy face-to-face or with direct human contact, almost three quarters of consumers (72%) say that direct selling does not have a valuable role to play in helping these groups to switch.

According to Ofgem, over half of consumers who switched in the past year did so through a direct or doorstep seller and vulnerable and prepayment meter customers are more likely to switch in this way. This suggests that rather than an outright ban, the regulator should be looking to keep open this important route to market for vulnerable consumers, but make sure they are fully protected and able to get the same level of information as those consumers who are able to shop around or do their own research.

Although Ofgem is bringing in rules to ensure that direct sellers have to provide consumers with a written quotation, uSwitch.com would also like to see consumers given more information about the types of deals available to them and a prompt to research the market before signing on the dotted line.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "It is good news that Ofgem is acting on this, but far more needs to be done to protect consumers and to make sure they are given all the information needed so they do not end up out of pocket. At the moment consumers are running scared of doorstep sellers and quite rightly so. With the right rules in place direct selling could be an effective way of reaching a wider range of consumers and encouraging people to switch to a better energy deal. It could particularly help the vulnerable and elderly who like the reassurance of face-to-face contact and are the groups missing out most on the benefits of a competitive energy market.

"Ofgem must make doorstep and direct selling transparent and fair for consumers. There has to be clear rules on what salespeople can and can't do. People will now be given written details of the energy tariff on offer and allowed time to decide whether it is right for them. But ideally they should also be prompted to research other energy plans before signing on the dotted line. People should not feel under pressure or intimidated by direct sales people into making a decision on their doorstep.

"Consumers also have to understand that if they are only being told about one deal from one supplier they are highly unlikely to be getting the best available deal on the market or even one that suits their needs. Energy tariffs are based on so many different factors including where you live, how you like to pay and what your usage is - without these details a salesperson cannot sensibly recommend an energy plan to you. With £395 between the most competitive online energy plan and the most expensive standard plan, there's a lot of scope to lose money if you don't do your homework first."