Protecting consumers and
Posted: 24 October, 2011. Written by Virginia Graham
With around 20 companies applying every day to become members of the REAL Assurance Scheme, it is inevitable that we find the occasional unscrupulous merchants trying their best to slip in, unnoticed, alongside the decent and hard-working companies who make up the majority of our industry.
The profile we see in the REAL office again and again is this: having established themselves with aggressive selling of double-glazing in the 80s, unscrupulous companies shifted to conservatories, driveways, alarms and solar thermal in the 90s, and are now trying hard to make their mark in solar PV. With capital costs falling sharply, companies can make a very good margin between now and next April, when the feed-in tariff level is revised. Sadly, their shenanigans run the risk of ruining the reputation of our industry, so in the REAL office a great deal of time is spent monitoring these companies. We act on consumer complaints as well as tip-offs from REAL installers, members of the publ ic, Trading Standards officers and others to keep these rogues out of REAL.
Typical cowboy procedures
Typically, an unscrupulous company will have self-employed salesmen who work to commission. (Almost always they are men, but although the term ‘he’ is used throughout for convenience, women are included as well.) These companies can be based anywhere around the country and might spend a few week s targeting a particular area with flyers and advertisements that shout over-ambitious claims, before the reps work the streets. Alternatively, they use lead-generator websites to create leads, which are picked up by their own call centres and turned into sales appointments – or ‘free solar surveys’ as they are more likely to be known.
Once that appointment has been made, the rep’s activities usually follow a certain pattern, too. Here are some of the classic scenarios we have come to know too well.
Overstaying the welcome
Any sales rep who visits the site and stays for a long period of time is suspect (more than two hours requires a written explanation to their company giving the reasons why they needed to stay so long). We know that many sales reps can stay just short of two hours without good reason, thereby just keeping within the rules – though one complainant told us of a rep who stayed six hours in their home.
The ‘cowboy’ sales rep will typically offer a high initial price and appear to negotiate heavy discounts, or offer a discount only if a contract is signed there and then. One rep we heard about dramatically reduced the price during his visit, from £20,595 to £14,416 for a 2.4kWp system. A classic example of this is where the rep nips out to his car, appears to ‘phone the boss’ and comes back in with a more generous-sounding offer. One inventive version we have heard of is the case of the salesman who insisted that he was from the ‘marketing’ department rather than ‘sales’. The prospective client was told that “if a proper salesperson had visited, she would be paying more for the system”.
A very large discount for ‘monitoring’ may be offered. One sales rep, at the end of a four-hour pitch, offered a discounted price for taking part in a monitoring scheme and agreeing to have photos taken for marketing material. This discount was “only avai lable for one person in the postcode, so they had better snap it up”. The salesman tried to put the client off from talking to their family about the offer. The client was then left wondering how they would ever get the sales rep out of their house. The rep might avoid the issue of price until the very end of the visit, once he feels he has got the customer’s trust – or he may insist on returning a bit later “to give them time to think about it”.
The rep will probably insist that both husband and wife are present at a sales visit, known in the jargon as a ‘three-legged’ pitch.
A product may be claimed to have a limited availability, and the rep may pressure a sale under this pretence.
A high deposit to secure a discounted sale may be demanded. On the other hand, the rep might persuade a consumer to take out a finance deal, or agree a very low deposit with a credit card, to secure a sale, and keep quiet about the cancellation form and seven-day cooling-off period.
Poor product knowledge
The rep might have little knowledge of the industry – recruitment ads for these salesmen often do not require any technical expertise. We have heard of salesmen showing materials for solar thermal when they were actually selling solar PV.
Targeting the elderly
Some reps have no qualms about targeting older people – sales being made to people with early onset dementia have been reported. One old lady, by the end of the sale session, had signed a cheque for a deposit of £3845 on a quoted total contract price of £14,800 for a 1.8kWp system.
Risks for installers
Increasingly we are seeing some of these companies operating outside the Microgeneration Certification Scheme (MCS) and the REAL Assurance Scheme, and relying on small local installers who are technically skilled and have the MCS certification that every installation requires to qualify for the feed-in tariff. These installers are expected to not just install a system, but also sign it off and provide the commissioning certificate. We tell our members to be very careful indeed when considering agreeing to such an arrangement with an unregulated sales company. If anything goes wrong, it is the installer, our member, and not the salesman, who takes the rap for misleading claims. We have heard horror stories of genuine installers turning up to jobs sold by cowboy sales companies, to find proposed instal lat ions on nor th-facing roofs, shaded by chimneys or trees. We are also aware of people buying heat pumps and paying large sums up front, only to be told they cannot have a grid connection.Any MCS-certified installation firm taking on work for a third-party company should be absolutely sure that they are comfortable with the sales techniques being employed. Any general marketing claims, as well as specific claims and forecasts offered to customers, must be compliant with the REAL Consumer Code. The MCS standards will shortly be revised to make it clear that only MCS-certified companies can sign contracts with consumers and take deposits.
Encouraging compliance with the Code
At REAL we are now dealing with 100 serious complaints a year in the solar PV sector, overwhelmingly about pressure selling, non-return of deposits and poor contracts. However, this needs to be seen in the context of 60,000 installations being carried out in the past year. The nature of the complaints is a daily reminder of why the REAL Consumer Code matters, not just to consumers but also to all of the serious and committed companies who work in renewables and want high industry standards. It is why we work hard to publicise the key features of the Code to the public, and it is also why we insist that our members be familiar with it. Our guidance for consumers, including our Top Tips, is available online at: www.realassurance. org.uk/pdf/top-tips-for-consumers.pdf.
REAL does a number of things to ensure that members are compliant with the Code. We audit a large sample of members, which involves visiting company premises for half a day. We also do online compliance checks and spot-check one in ten of these. Spot-checked companies have to submit working examples of quotations, contracts, screenshots of their client accounts, and evidence of insurance and installer warranties. We do mystery shopping too. We offer plenty of guidance and other useful information, along with model documents, for members and companies looking to join REAL. You can find them in our members section.
If you come across a firm fitting the above descriptions of unscrupulous practice, please let us know and include as much evidence as you are able. It is hard work rounding up cowboys, but the REAL team is determined to chase them out of town.