Households have been warned to be on their guard against doorstep energy salespeople, despite new rules that aim to offer consumers greater protection.
Energy suppliers must now provide customers with a written estimate before a direct sale can go through, under new rules introduced from 18 January 2010. The move comes after an investigation by regulator Ofgem found that 48% of gas switchers and 42% of electricity switchers who sign up to tariffs offered by doorstep salespeople ended up paying more as a result.
The regulator said this was partly down to consumers failing to shop around and compare tariffs – but also because some salespeople were misleading customers. Vulnerable and pre-payment meter consumers were found to be most likely to sign up to directly sold tariffs but were particularly at risk of losing out.
Under the new rules, energy plans sold on doorsteps, in the high street or even in shops must come with a written quote before the sale can go through. This not only provides them with proof of the price they were offered, but will also help them check the price against other deals on the market.
But Ann Robinson, director of consumer policy at uSwitch.com, says the new rule will not guarantee consumers get the best deal - or even a better deal.
“It’s about making sure they have written proof of what they’ve been offered. It is then down to them to take this information and check for themselves whether they will be better off or not,” she explains.
The fact that energy doorstep salespeople are tied to just one company, and cannot offer deals from across the market, means consumers should avoid them as much as possible, says Joe Malinowski, founder of energy price comparison website TheEnergyShop.com.
He also points out that monthly direct debit deals, which often represent the best value for consumers, are not often available through doorstep switchers.
Malinowski adds: “Finally, energy suppliers do not subscribe to a code of conduct that requires them to make 100% unbiased or comprehensive comparisons. It is questionable whether the comparative quotes provided under the new rules will be up to date, accurate or comprehensive.”
How to deal with energy salespeople
1. Who are you dealing with?
Check the salesperson’s identity and make sure you know what company they are representing. They should carry an official company badge.
It’s worth making a note of these details – if you have any concerns about their identity, contact the company and check their credentials.
2. How to get your quote
Get the written quotation before making any decision to switch. Ask the salesperson to talk you through all the deals on offer, including their cheapest plan and online tariffs, and get a quote for all of these.
They should have asked you for details of: your energy consumptions; your current tariff and monthly energy spend; your property type, including the number of rooms and residents; and your preferred payment method (eg: direct debit or cheque).
3. Don't fall for this trick
Don’t show the salesperson a copy of your energy bill or allow them to come in to read your meter. According to Malinowski, this could be a trick used by unscrupulous salespeople to get important details about your supply and to switch you without your approval.
4. Questions to ask
Make sure you ask the agent for as much information as possible. For example, are any additional incentives or discounts (such as for paying by direct debit) being taken into account?
Does the plan carry a standing charge, and are there any exit penalties?
Once you have all this information, don’t allow the salesperson to pressurise you into signing up to a tariff there and then. You should instead arrange for the agent to call back at a later date.
In the meantime, make sure you do some research. Call your current energy supplier and explain that you are considering switching and outline the new deal on offer. See if it will offer you a new tariff that competes. Also, check whether you will face any exit charges if you do sign up for a new deal.
Once you’ve spoken to your current energy supplier, make sure you use an internet price comparison website (or call suppliers directly) to find out how other tariffs on the market compare.