Energy companies found to have mis-sold electricity and gas deals to consumers should pay compensation to consumers, according to MPs. In a report by the Energy and Climate Change Committee, ‘Ofgem’s Retail Market Review’, MPs have shown concern that consumers have been taken advantage of by aggressive door-to-door sales people.
Tim Yeo MP, Chairman of the Committee, said: “If it turns out that consumers are being persuaded to switch contracts when it’s not in their best interests, by salespeople keen to earn commission, then it would only be right for the energy companies to cough-up compensation.”
He added that picking a tariff caused extra problems: “Electricity and gas tariffs are now so complex that even the Energy Minister admitted he got confused when trying to switch. SSE recently announced that it would suspend doorstep selling following its hearing in front of the Select Committee, we welcome that decision.”
Ofgem have suggested that up to 40% of consumers who switched power companies did not end up with a better deal and research from Consumer Focus shows that more than nine out of ten people who bought energy products on the door would never do so again.
Mike O’Connor, Chief Executive of Consumer Focus, said: “Switching on the doorstep has left too many consumers getting a raw deal. It is time for a line to be drawn in the sand. Suppliers must stop cold call sales and find an alternative that works for its customers. The customer compensation proposed by the Select Committee could give an extra incentive for suppliers to finally resolve this long-standing problem.”