Daily Mirror 31 January 2007:

Darren George faced a massive £2,000 increase in his gas bill each year until Your Money stepped in. We persuaded his energy supplier to cancel his contract and put him back on to a lower rate. The chip-shop owner from Sheffield was tricked into switching his gas supplier to a deal costing twice as much. Darren was called by “Ruby” from Energy Assure last year. She told him they could put him onto a much better gas deal. He asked her for details in writing but heard nothing until he received a shocking letter on January 15.

“It was an invoice from Elf Business Energy for gas at a rate of 4.2p per Kwh. My existing Powergen rate was only 2.03p per Kwh so I worked out the new deal would cost me around £2,000 extra,” stormed Darren. “I never gave them permission to switch me, they just went ahead and did so. I’m fuming.” When Darren contacted Elf to say he had been tricked into a four year deal with them, they told him that there was nothing they could do. They said he had agreed to a telephone contract which is binding.

But after Your Money intervened, Elf backed down and ripped up his contract. Andrew Hogg of Elf Business Energy said: “We recognise that the customer is unhappy and are working to restore the contract with his previous supplier.” Meanwhile, Nick Sandham of Powergen said: “We will ensure that Mr George is able to transfer back to Powergen as quickly as possible.” But Simon Howarth, boss of the switching company Energy Assure, denied that Darren had been tricked into changing suppliers. Darren disputes Energy Assure’s version of events. Howarth’s answer? “Sometimes customers suffer from memory loss.”

Stephen Alambritis of the Federation of Small Businesses said it was a common complaint. He warned Britain’s 4.2 million small businesses to be on their guard to avoid being tricked in the same way. “Rogue switching agents prey on the fact that small businesses have a busy workload,” he said. “They trick people into these telephone contracts.” Energy Assure’s Howarth said he had no sympathy with businesses which claimed to have been tricked on the phone because they were busy. “It’s the customer’s fault,” he told us.

He added that Energy Assure no longer sold gas or electricity and that Ruby, the salesperson who dealt with Darren George had since left the company. Elf blamed the problem on “miscommunication”. But Andrew Hogg added: “We provide our agents with clear guidelines on contract sales. Any departures from these guidelines are taken very seriously and we have taken this case up with the agent in question.” Tens of thousands of businesses are being targeted by rogue energy salespeople, according to Energywatch.

With small firms spending £2.3billion a year on energy it’s big business. The watchdog said that 125 businesses had complained about marketing tactics in the past six months but the figures were “just a small indication of a bigger picture.” Energywatch’s Karl Brookes warned: “Companies don’t have the same protection as consumers and Darren George’s case highlights the loopholes that some rogue agents will continue to exploit. The dodgy switchers use phrases such as “Shall we continue?” to trick small companies into agreeing a telephone contract. And before they know it, small firms have been switched to another energy supplier often with more expensive bills.

The scandal came to light following Your Money’s exposure last week of the dodgy tactics used by energy salespeople to sell contracts to home users. After we intervened NPower admitted persuading widow Jean Cox to ditch British Gas even though her power bill would have soared by a quarter. Now it’s clear that small businesses are even more likely to become victims as they have less legal protection than domestic users.

The problem is set to escalate, says Energywatch. As well as having no cooling-off period where firms are legally bound to a contract as soon as they agree, even if that is over the phone firms have to stay with suppliers for a minimum of a year. If they are tricked into a long-term contract like Darren George, they could be tied to an expensive deal for up to five years. Energywatch has linked with the Federation of Small Businesses to provide practical guidance to firms about energy matters, including how to handle sales calls from energy suppliers. Go to www.smallbusinessenergy.org.uk for information or for advice on switching, go to www.energywatch.org.uk or call 0845 906 0708.

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