THE salesman lowered his voice conspiratorially and shot a glance around to
check nobody was listening. Aneel Khan, a 25-year-old acting manager, wanted
a private word with the young female recruit before him.
He clearly felt the recruit, fresh from a training course on door-to-door
selling techniques, needed to be told how to approach customers in the real
world outside the classroom.
Leaning closer, he said: “Okay, two things: whatever I’m doing here you don’t
have to discuss with anyone else, because if you’re going to be very honest
we can’t sell anything.”
Without waiting for this to sink in, he went on quickly. He said the recruit
must get residents to sign contracts agreeing to change their supplier of
gas and electricity using whatever means necessary.
“You have to tell them a few things which we aren’t really offering, but after
signing it you’ll have to tell them everything. If I’m going to say [the
truth] before signing it, nobody will [be] going to sign it.”
Khan cut a distinctive figure, his bright red shirt standing out against the
grey tower blocks in the south London street. The shirt is the uniform of
Npower, one of Britain’s biggest ener gy companies, which has been growing
at a rate of more than 450 customers a day.
Much of the expansion is down to the efforts of people like him. Over the
course of the next few hours and days, he proceeded to show exactly how he
had achieved his position within the company: by relentlessly lying to
everyone to whom he was selling. Nor was Khan the only such salesperson.
Almost every Npower sales rep the newly recruited woman came into contact
with behaved in a similar fashion.
Unfortunately for them, the new female recruit was an undercover reporter for
The Sunday Times. She had joined Npower a week earlier to uncover the
methods used by a company that has more than 6m customers.
The reporter had good reason to investigate. While Npower increased its
profits from £403m to £571m last year, the company is also developing an
unfortunate reputation.
“Npower is the worst performer in so many categories,” said Adam Scorer,
campaigns manager for Energywatch, the consumer watchdog. “It comes bottom
for disconnecting customers, for not helping poorer customers and for
discrepancies between tariffs.”
Perhaps most worrying of all, Npower has the worst record when it comes to
complaints about mis-selling on the doorstep. In the past five months
Energywatch has been contacted by 429 people complaining about Npower’s
direct selling techniques. The figure was two-thirds more than the number of
complaints for the next highest company.
Because of the complicated system by which such complaints are processed, only
a small percentage have been officially logged as “formal complaints”. The
others are referred back to the company. Scorer believes, however, “the
number of people who actually call us is just the tip of the iceberg”.
Mis-selling by utility companies is not a new phenomenon, but for years it has
been considered, by the industry at least, a problem of the past.
It first emerged after the deregulation of the energy supplying industry in
the late 1990s. In the resulting climate of fierce competition a number of
companies’ salespeople misled customers as to their products and even their
identities.
Three years after The Sunday Times first exposed the issue in 2000, a clamour
for action resulted in a code of practice for face-to-face marketing being
brought in by the Association of Energy Suppliers.
The code required, among other things, salespeople always to identify
themselves clearly to potential customers and to explain what they were
offering. They also “must not exploit a person’s inexperience,
vulnerability, credulity or loyalties”, it says. Giving out misleading
information over potential savings is particularly to be avoided.
Last year 5m customers in Britain were persuaded to change supplier, the
highest figure since 2002, which was heralded by Ofgem, an industry
regulator, as evidence of market forces working well. However, a study by
the University of East Anglia found a third of those changing were now
actually worse off as a result.
At the same time, complaints about Npower mis-selling to customers have
rocketed. Since August last year it has consistently topped the Energywatch
mis-selling league.
So what was the truth behind the new wave of mis-selling, and is it true that
Npower’s sales staff are not to be trusted?
The reporter successfully applied to join the company as a sales adviser
shortly before Easter. After a couple of interviews she was offered a
position and told that her basic salary would be £11,000 a year, with
commission on top.
This would accrue by signing up householders to become new customers.
Depending on which utility and which precise package they sign for, an
Npower sales rep could earn up to £134 for each customer. Their target was
40 sales a week.
Andy Warner, head of Npower’s sales teams in London, later gave a motivational
talk in which he made it clear what was expected. “I would like it that you
go out there, you work a few days, you don’t try particularly hard, you go
and have a nice life and you earn £50,000 a year while you’re doing it . . .
go out there, get on with it, do it and earn a fortune for all of us.”
First there was the training course, in which the reporter was taught to work
in line with the code of conduct.
However, as soon as she was sent out into the streets of London to accompany a
more experienced Npower salesperson, much of the training she had received
was in effect thrown out of the window.
She was told to “shadow” Steve Dempster, an award-winning and highly
successful Npower salesman. One of the first things he said was: “What you
hear me say to customers doesn’t go anywhere, right?”
Dempster, who boasted that he earned £70,000 a year from working only two
hours a day, three days a week, evidently did not want his sales secrets to
get into the wrong hands.
The burly salesman then proceeded to demonstrate his standard doorstep “pitch”
on residents in Hackney, east London.
“Hello, my love, electric board . . . I’m from the electric board. Just to let
you know: we’ve taken over Tilbury and Dartford power stations.”
This was often accompanied by the phrase: “I’m not a salesman, all right, I’m
not trying to sell you nothing.” Only occasionally did he mention that he
was working for Npower, although he usually wore the red company uniform
and, as with all salespeople, a name badge around his neck with Npower’s
logo.
However, not only was Dempster very much a salesman but it was entirely
misleading to suggest that Npower, let alone the “electric board”, had taken
over either Tilbury or Dartford power stations. Tilbury and Dartford (its
correct name is Littlebrook) had been owned by Npower since inheriting them
from the old Central Electricity Generating Board, a spokeswoman confirmed
last week.
Having established the urgent nature of the pretext for his visit, Dempster
then told each customer that they were paying too much money.
He randomly chose figures to throw at them. Since Npower owned the local power
stations, the customers, who were nearly all using “prepaid” meter keycards
topped up with cash at high street outlets, could save by signing with them,
he said.
“We’ve sold that to your supplier for £7, and they sell it to you for £10,” he
said, and then went on to imply they could sell it to householders for
wholesale prices. “What we’re going to do is . . . send you a new key, and
you’re going to put £7 on the key, in the future, and that will give you
£10worth of kilowatts.” On another occasion Dempster said the “supplier” bought
the electricity for £8.
However, Energywatch figures show that Npower is in fact the most expensive
supplier of electricity on prepaid meters. An average annual bill for such a
customer would be £440. The cheapest, E.on, is £393.
After signing up a few new customers, Dempster showed that it was not only the
householders who were being deluded. “Every single word I’m saying is true,”
he said when asked about his pitch. “That’s why they can’t get me.” The next
day, the reporter was tasked with accompanying Khan on his rounds. After his
opening spiel, Khan showed that he was even less bothered about adhering to
the truth than Dempster.
He also freely told householders in the Oval, south London, that he was from
“the electricity board” but frequently went a step further and insisted this
meant that his company owned all the others.
“We’re coming from the electricity board, the board who controls all the
companies, British Gas, EDF and Npower, right?” he told one customer before
giving him entirely fictitious figures about how much money he would save if
he signed up.
“Yeah, but then I’ll be with Npower, innit?” said the woman, reading Khan’s
name badge.
“No, the thing is you’re already with us, right?” said Khan.
“How am I already with you? I’m on British Gas,” came the reply. “Because we
are from the electricity board and British Gas work for us,” said Khan.
Khan threw varying and incorrect “tariffs” at customers, claiming they were on
the wrong one and he would change it and save them hundreds of pounds.
“Are you trying to tell me I must join another company?” asked one would-be
customer. Khan replied: “You’re not going to join any other company.”
Asked what the “catch” was, Khan said there was none. “We’re just trying to
save you money, simple as that,” he said.
In conversations with the reporter Khan confessed he knew what was he was
doing was “bad” and not to tell anyone that he made up figures. He made it
clear that whether or not the customer was saving money was irrelevant.
“When they use it [the gas or electricity] for one month, like eight weeks,
seven weeks, we’re gonna get the commission. After that, if they cancel it,
who cares?”
Later the reporter watched Rekhi Dey, a former sales rep for British Gas, who
had recently switched to Npower, deceive a homeowner on her doorstep by
telling her that if she switched suppliers she would no longer have to pay a
standing charge and her prices would be fixed for the next three years.
In fact, the 2011 price freeze is available only to customers paying by direct
debit, which the householder, Dainora Tribaldoviele, a Lithuanian, was not
doing. Dey later admitted to the undercover reporter that she had lied. She
said: “We have standing charges . . . don’t worry about it. You could see
that she was not able to speak good English . . . so you can just say there
is no standing charges.”
She also admitted lying about the price freeze and said if the customer had
been English, she might have lied, but would not have left any literature
behind so that nobody could read the small print afterwards and then make a
complaint.
Npower operates a two-tier complaints procedure. Minor indiscretions, which a
spokesman said might be “entering someone’s house with muddy feet”, would
result in a penalty point against the salesperson.
After accruing five points, the salesman would be subjected to some form of
discipline, which might see them dismissed, or just “retrained”. Steve
Conrad, a manager, told the undercover reporter that this process could last
as little as 10 minutes. More serious offences would garner instant
five-point penalties.
Richard Frost, an Npower spokesman, who insisted that the overall level of
complaints against the company was “quite modest”, said the Sunday Times
allegations would constitute five-point penalties. “We are concerned, this
doesn’t happen every day of the week and we will basically shut down that
sales team while we conduct a full investigation,” he said.
I feel betrayed, I was assured of saving money but my bill rose from £36 to
£99 a month
Dainora Tribaldoviele was tricked into switching to Npower by the saleswoman
Rekhi Dey last week.
Tribaldoviele, whose family live in Hounslow, west London, was seen as a soft
target by Dey because she is from Lithuania and “not able to speak good
English”.
Dey claimed she would not have to pay a standing charge for electricity if she
swapped to an Npower meter keycard. This was untrue, as Dey later admitted
to an undercover reporter. Dey also said prices would be frozen until 2011,
but deliberately failed to mention that this applied only to direct debit
payers, an option not even offered to Tribaldoviele.
Tribaldoviele said this weekend she would now cancel the contract: “The
saleswoman was very confident and talking very quickly. I am not the sort to
close the door on someone. That was my mistake.”
Morne Van Rensburg, 30, from south London, was a victim of Aneel Khan’s
deceitful sales patter: “I got the drift he was from British Gas, because
that is who I am with now . . . When I signed the forms I could see it said
Npower and I said to him, who do you work for? But he blanked the question.”
The reporter recorded Khan telling Rensburg he was not switching his supplier
as all the companies are part of the “electricity board”. Rensburg said this
weekend he had not realised that Khan had indeed switched him to Npower: “I
said to him, I don’t want to change supplier. He said, you don’t have to.”
Sharon St Claire from Cardiff changed to Npower last year after a visit from a
“charming” salesman. But despite his assurances of saving her money, her
£36-a-month bill rose to £99 two months ago. “How it can more than double is
beyond me. I feel betrayed by Npower,” she said.
Rip-off inquiry
Andrew Duff, chief executive of RWE Npower, is having a good year. In February
his company reported record profits of £571m, the equivalent of £83 per
customer and a 41% rise.
His own earnings are also looking healthy. In 2006, the most recent figures
available, Duff earned a salary of £780,435, boosted by an extra £20,000 for
his pension pot and an undisclosed bonus.
While he has enjoyed a 15% pay rise, it is a very different story for his 6.8m
customers. In January he raised average electricity prices by 12.7% and gas
prices by 17.2%.
Within a month, four of the “big six” energy companies followed with almost
identical rises. Many customers viewed the timing with suspicion - and with
some justification.
The Sunday Times found that the “big six” had raised prices and reaped record
profits by stifling competition. Industry insiders allege that smaller
rivals were denied fair access to their power.
The allegations forced Ofgem, the regulator, to launch an investigation into
the market. The companies will face further scrutiny in parliament from the
business, enterprise and regulatory reform committee which will examine
whether consumers are being ripped off.
