Energy firm SSE brings an end to cold calling

Guardian News and Media/London

SSE and E.ON, two of the big six energy groups, have scrapped the practice of cold calling potential customers in the wake of a regulatory crackdown. But it comes as an expert has warned that the end of doorstep selling and multi-tariffs could be benefiting companies more than customers.

There are concerns that the “churn rate” of energy users switching to rival providers to win more attractive deals has more than halved since companies were encouraged by the regulator, Ofgem, to halt what had been seen as predatory practices.

The move by SSE came just months after it was handed a record £10.5mn fine by watchdog Ofgem for mis-selling, in an episode that its boss admitted made him “ashamed”.

In future only existing SSE customers or potential new ones who have agreed to a call will be contacted.

Will Morris, SSE’s retail managing director, said: “Nobody likes receiving a sales call out of the blue and so we are stopping it”.

E.ON also confirmed it would stop all unsolicited residential telephone sales calls with immediate effect.

Anthony Ainsworth, sales and marketing director of E.ON UK, said: “Listening to our customers is critical to everything we do and as we’ve repeatedly shown, and are showing, we’ll make the changes needed to constantly improve and offer the best service we can.”

E.ON will only contact residential customers and potential residential customers that have consented to be contacted.

This includes not contacting former residential customers who have not given consent.

The two companies’ moves come after the government said last month it would take steps to make it easier for regulators to stop firms bombarding people with unsolicited calls, amid growing concern over the scale of the problem.

Ministers plan to reduce the legal threshold of what is judged to be nuisance calls to allow watchdogs to investigate “annoying” and “distressing” communications as well. But Peter Atherton, a utility analyst at Liberum Capital , said power companies have privately admitted to him that the churn rate of lost customers had slumped from between 15%-20% in the last few years to around 7%.

This had been attributed to the end of doorstep selling in particular which had been an effective way of attracting customers from rival firms.