Ofgem to punish unfair sales tactics

Gas and electricity companies which use unscrupulous doorstep sales tactics to sign up new customers face fines running into millions of pounds under a crackdown announced yesterday by the energy regulator Ofgem.

Suppliers found guilty of breaching their licence conditions will be liable to financial penalties equivalent to up to 10 per cent of their turnover, the watchdog said. They will also be publicly named and shamed.

The tough new approach follows persistent complaints from householders about aggressive and sometimes illegal doorstep selling techniques as suppliers fight for bigger shares of the market.

Under the Ofgem proposals a supplier will be subject to investigation once complaints exceed a certain threshhold. The supplier will also have to have been one of the two worst offenders for two consecutive months.

John Neilson, Ofgem's managing director for customers and supply, said it was relatively uncommon for customers to suffer misselling but a minority of salesmen continued to resort to unscrupulous methods. "This threatens to undermine the competitive process which has brought cheaper gas and electricity for so many consumers. This must not and will not be tolerated," he said.

So far two suppliers – London Electricity and Npower – have been publicly censured and given 12-month periods to stamp out unacceptable sales tactics.

The consumer body Energywatch welcomed the crackdown, saying that in a recent NOP survey, more than half of customers had felt pressurised during contact with sales agents.