OFGEM's proposed clamp-down on rollover contracts could see more business energy consumers plagued by cold-callers, according to the commercial electric price comparison service Energy Advice Line. Julian Morgan, managing director of the price comparison and switching service for energy consumers, said the reforms were one more reason for cold calling to be banned by the energy regulator.
Under changes to come into effect this year, small businesses will no longer be rolled over onto expensive contracts for a minimum of 12 months but will now move onto "out of contract" rates when their fixed term contract expires. At the end of the contract, suppliers will also have to provide businesses with information on how much energy they have used in the last year and provide a comparison between their current rate and new rates they are offering.
We welcome the changes to rollover contracts, which have been a huge burden for businesses for a long time, however, Energy Advice Line who campaign against cold calling on business energy believe that SME's in the UK could now see an increase in this approach given the probability of a customer being out of contract.
"Being automatically rolled over onto an onerous and expensive out-of-contract tariff has driven some business to the brink of financial ruin. However, our concern is the potential for cold calling to skyrocket unless cold calling on business energy is banned or regulated. Cold calling is a numbers game. You have got commission hungry sales people who are given lists of customers to call every day. Given that a higher number of customers will now be out of contract cold callers stand a greater chance of getting hold of an unsuspecting customer and pressurising them into a decision."
The Energy Advice Line has been actively campaigning for OFGEM to outlaw cold calling on the grounds that businesses are often hounded and exposed to unscrupulous sales tactics by rogue energy brokers. "I believe these changes to rollover contracts will invite a lot more cold calling, not only from brokers wanting to sell them an energy contract, but from agencies that are tasked with mining contract end dates," Mr Morgan said. He said that as well as looking for businesses to sign up to energy contracts, cold callers would increasingly be making unsolicited calls to businesses to mine them for information about their energy arrangements.
Data like contract end dates is extremely valuable and can be sold on by unscrupulous agencies and brokers who will call back when the time is right to try to make a sale. Ofgem really needs to come down hard on cold callers who often exploit businesses by using heavy-pressure selling techniques to sell them deals they claim to be the cheapest on the market.
Mr Morgan urged business energy users never to engage with cold-callers, who were often acting on behalf of a single energy supplier despite claiming to give impartial advice. "Hundreds and hundreds of UK businesses have been caught in the cold-caller trap by inadvertently signing up to expensive deals simply by engaging in a telephone call," he said. "Reputable and independent price comparison and switching services don't cold call prospective customers, or place them under any pressure to sign up to an energy deal."
The Energy Advice Line is the UK's leading impartial comparison, switching and advice service for businesses and householders. It actively campaigns for reform of the UK's energy market to boost competition, get consumers a better deal from suppliers and lower energy prices.