OFT calls for better standards from energy efficiency providers
The Office of Fair Trading (OFT) has urged the energy efficiency sector to ensure it is providing consistently good standards to consumers.
As part of its drive to raise compliance standards across the sector, the OFT has written to over 50 of the leading installers of double glazing, insulation and solar panels.
The review of the sector, published today, found instances of poor practice towards consumers such as the use of high pressure sales techniques, unclear information about paperwork and cancellation rights, and poor quality installations.
With sales worth around £18bn in 2010-11, the wider energy efficiency sector is expected to be an area of substantial economic growth in the future, particularly with the launch of the Green Deal later this month.
However, the OFT’s review found that the behaviour of some businesses in the sector, including instances of poor practice which might breach consumer law, risk undermining consumer confidence and limiting expansion of the market.
Concerns include instances where consumers have been given potentially misleading or inaccurate information about the energy they could save or their eligibility for a grant or subsidy.
The review has also highlighted the use of high pressure selling techniques, such as salespeople staying in consumers’ homes for several hours, or indicating that a product is only available at a discount if bought immediately.
Addressing these concerns, the OFT is working with fellow enforcers, regulators, government, industry and consumer groups to promote a consistent level of good business practice.
Through this initiative, the OFT has advised businesses of their obligations under consumer protection law, and has highlighted that they are responsible for the actions of their representatives, whether employed directly or indirectly – for example as third party lead generators or canvassers.
It has also opened an investigation which focuses on business practices that raise some of the more significant concerns, working closely with the Local Authority Trading Standards Services (TSS).
Director in the OFT’s Services, Infrastructure and Public Markets Group, Nisha Arora, said: “Energy efficiency products offer real benefits to consumers and the sector has significant potential for business growth.
“However, it is important that people can be confident the companies they deal with are complying with the law, and that they are able to make informed purchases, without pressure sales techniques”.
Arora added that many businesses in the sector comply with the law and engage in good business practices but urged others to raise their standards.
“Businesses that fail to address the issues that we have identified risk enforcement action,” she said.
Welcoming the OFT’s review, Energy and Climate Change Minister Greg Barker focused on the Green Deal’s aim to open up the energy efficiency market, while highlighting the protection it offers to customers.
“The Green Deal sets robust standards where only accredited or authorised players may operate in the market; and is underpinned by the highest standards of consumer protection. The Green Deal Quality Mark – which must be displayed by all authorised participants – is the mark of this quality and trust,” he added.
However, Director of energy at Consumer Focus, Audrey Gallacher, was not quite as optimistic as Barker about the level of service some companies are providing.
“This is a multi-billion pound industry and it appears the practices of some companies are falling way short. High pressure sales tactics are the last thing consumers need if they are to make an informed choice before buying double-glazing, insulation and solar panels. The OFT is right to be marking the cards of companies who are acting improperly.
“The Green Deal is likely to see more consumers looking to invest in energy efficiency measures, so before they proceed, people need to be aware of their rights and how to spot potential pitfalls. It is also important that home-owners get good advice so that they can choose what is right for them and their property,” she added.
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