31 Jan 2002 – Ofgem, the UK gas and electricity regulator, yesterday said it would be extending for a further two years the package of rules governing the way companies sell to potential customers. The statement coincided with a call from consumer group Energywatch for tougher rules to stop unscrupulous sales staff conning householders into switching electricity and gas supplies.
Ofgem argue that the opening up of the retail market to full competition has been a success judged by the number of customers switching. “Almost a million customers a month are currently switching suppliers,” said Ofgem’s Managing Director, customers and supply, John Neilson. “We take very seriously any action by suppliers which undermines consumer confidence in the switching process,” he added.
Energywatch claim that cowboy tactics are widespread and are on the increase including the forging of signatures on switching contracts. It has called for companies to pay compensation to consumers for distress caused by sales malpractice together with the establishment of a blacklist of firms and individuals responsible for the abuses.
Utilities argue that selling on the doorstep is the most efficient way of persuading consumers to switch suppliers, although a recent survey by industry analysts Datamonitor suggested that utilities were wasting time chasing new business and instead should be better servicing existing customers who they would otherwise lose.
The rules being imposed by Ofgem take the form of conditions contained in the companies supply licences which were first introduced four years ago and strengthened in June 2000. Ofgem said it would be extending the current marketing licence conditions for a further two years, would be seeking views on how the rules might be strengthened and undertaking research about marketing complaints.
In its statement, Ofgem drew attention to an independent MORI survey which found that almost 90 per cent of people who have switched their gas and electricity supplier have found it easy – and 66 per cent of all electricity switchers and 58 per cent of all gas switchers found it very easy.