27 May 2003 - The unveiling of a new code of practice aimed at stamping out misselling of gas and electricity contracts is an important step towards encouraging more customers to switch energy suppliers and save money, says energy regulator Ofgem.
Ofgem welcomed the announcement today (Tuesday) by the Association of Energy Suppliers (AES) of a new Code of Practice for the Face-to-Face Marketing of Energy Supply. The AES also announced the appointment of Enstra Energy Services as the 'Code Administrator'.
The code, developed in consultation with Ofgem, consumer body Energywatch and the industry, commits all major energy suppliers to higher standards in energy sales and includes a commitment to pay compensation to customers affected in specified circumstances.
Ofgem's Managing Director, Customers and Supply, John Neilson, said: "We have demonstrated our commitment to combating misselling by imposing a £2 million financial penalty on London Electricity last year. Enforcing obligations against misselling continues to be a high priority for us.
"Today's announcement by the AES is welcomed as we support self-regulation. The Code now has to demonstrate it can make a difference. Its credibility will depend on rapid action being taken under the Code against suppliers with misselling problems. The setting up of a strong independent administrator with powers to penalise suppliers for any breaches is a very welcome development, and we have high expectations that this Code will help stamp out misselling and give customers more confidence in switching gas and electricity supplier. This is a valuable contribution to our own commitment to make markets work for customers.