NMa: 'Abuses in canvassing by energy companies not structurally pervasive'

Research carried out by the Netherlands Competition Authority (NMa) has shown that unfair switches in the energy sector are not structurally endemic, but that they have been known to occur. The NMa takes the view that more needs to be done by the energy companies to keep such incidents to a minimum. The NMa will keep this matter under constant review because the reversal of unfair switches is very time-consuming. Energy consumers also need to be vigilant and stand up for their rights. They should not delay in taking action when they feel they have been unjustifiably switched.

The NMa believes that customer recruitment must be in line with the rules of competition in the energy market. This helps to guarantee real choice for the consumer as well as consumer confidence in the market.

Responding to a number of complaints about unfair switches in the third quarter of 2007, the Netherlands Competition Authority conducted an investigation to determine if unauthorised switching of customers had taken place structurally. The NMa reviewed the procedures of four energy companies together with some 900 complaint files for the period March to December 2007. The investigation showed that no structurally unfair switches of customers had been undertaken by these energy companies. It also showed that energy companies have a policy and procedures in place to prevent unfair switches. For example, the energy companies investigated all have signed agreements with the call centres which incorporate financial arrangements aimed at recruiting satisfied customers. In following these procedures, however, it does happen that companies make errors which can result in a time-consuming reinstatement process for the customer.

'The NMa believes that any error is one too many. Companies have a number of measures they can take to prevent the occurrence of errors. If companies fail to implement these measures and consequently make a lot of errors, the NMa will take action against these companies,' said Peter Plug, Manager of the NMa's Office of Energy Regulation.

Companies can prevent unfair switches by implementing stricter controls of the recording of telephone sales conversations, by including a verification check in the telephone conversation and via improved provision of information to customers during the sales talk.

The Netherlands Competition Authority also calls on consumers to remain alert and to bring problems to the attention of the energy companies. The investigation showed that energy companies tend to pay heed to such customer complaints. It must be clear to consumers that in giving affirmative replies during a telephone conversation, they are entering into a contract (as when placing a signature). The contract then takes effect after the cooling-off period, which may be cancelled within seven working days, if consumers happen to change their mind. Providers are obliged to inform consumers in writing about the existence of the cooling-off period within which they can cancel the agreement.

For more information on the rights and duties of consumers regarding customer recruitment and switches, the Netherlands Competition Authority refers consumers to the website www.ConsuWijzer.nl (external website) which includes - among other things - five information sheets with practical advice on the rights of the energy consumer.