Consumer Authority fines NLEnergie for misleading telephone canvassing

The Consumer Authority has imposed fines totalling EUR 1,020,000 upon the Nederlandse Energie Maatschappij (NLEnergie) for misleading canvassing by telephone. During the period from October 2008 to July 2009 the company contacted a large number of consumers in order to persuade them to take out an energy supply contract. In doing so, however, NLEnergie failed to comply with a number of rules that must be observed when carrying out telemarketing activities. One of those rules requires that at the start of a telemarketing call, the company concerned must clearly state the name of the company and the commercial purpose of the call. NLEnergie failed to state these clearly. Misleading information was also provided with regard to the costs and the price advantage available to the consumer.

As Bernadette van Buchem, the Director of the Consumer Authority explains: "By its very definition, telemarketing catches consumers by surprise. It is also the case that many consumers simply do not know how energy contracts actually work. That is why it is important that the company involved must provide full and accurate information, though in this particular case, it failed to do so".

Background to the decision

The Consumer Authority's information desk, ConsuWijzer, received a large number of complaints about the misleading telemarketing practices of the Nederlandse Energie Maatschappij and it was on the basis of those complaints that the Consumer Authority launched its investigation. The Nederlandse Energie Maatschappij was making use of a number of different external call-centres. Those call-centres made calls to a large number of consumers, unannounced, asking them to switch from their current energy supplier to the Nederlandse Energie Maatschappij. At the beginning of the call, the consumer was not clearly informed as to which company was making the call. Many consumers believed that they were speaking to their current energy supplier. The telephone salespeople told consumers that they were eligible for a lower energy tariff, by virtue of where they live or because a survey had revealed that they were already paying too much for their energy. Incorrect and misleading statements were also made with regard to the price advantage that could be achieved, and insufficient information was provided upon the circumstances and conditions that consumers would need to fulfil in order to benefit to that extent.

Contracts were also sold to vulnerable consumers, such as those who were advanced in age. This forms a contravention of the Consumer Code of Conduct [Gedragscode Consument], which all energy companies have undertaken to adhere to. Acting in contravention of a code of conduct that a company has signed up to is regarded as unfair commercial practice.

As a result of the unprecedentedly extensive nature of the telemarketing activities carried out by the Nederlandse Energie Maatschappij, the number of consumers who have been confronted and possibly disadvantaged by the company's misleading and sometimes aggressive commercial practices is very large. The irregularities and misleading statements were of a fundamental nature and the Consumer Authority took this into account in determining the level of the fine to be imposed. No incremental penalties have been imposed, however, as the company ceased its telemarketing activities of its own volition in mid-July 2009.

The Nederlandse Energie Maatschappij has submitted an objection against the decision.