High pressure sales make bad impression

Door-to-door sales agents canvass the Ghetto looking to lock students onto contracts with independent energy companies

According to staff responsible for training sales agents, it’s standard practice that door-to-door sales staff work on a commission-based salary.
According to staff responsible for training sales agents, it’s standard practice that door-to-door sales staff work on a commission-based salary.

Two weeks ago, Vanessa Amodeo answered the door of her Alfred St. home to something familiar—a salesperson wanting to switch her over to a new utilities service.

“The more aggressive ones will go on and on about how we’re going to get screwed over if we don’t sign up,” Amodeo, ArtsSci ’11, said. “We’ve probably had five people come to the door this year alone.”

Earlier this year Campus Security issued a report warning students of sales agents canvassing the Student Ghetto asking students to show a recent utility bill and offering to switch them over to another service.

“I’ve heard from my parents that they’re mostly just scams,” Amodeo said. “I usually just tell them that the person who deals with the bills isn’t home.”

The root of Amodeo’s problem dates back 10 years to a switch in Ontario policy that allowed for the emergence of independent energy providers, many of which use door-to-door sales tactics to recruit customers. The deregulation of the Ontario marketplace in 1999 created an opportunity for businesses to offer an alternative to local utility providers.

Paul Crawford, communications advisor for the Ontario Energy Board, said most independent energy resellers offer fixed rates on three or five year contracts instead of the varying price offered by local utility providers like Utilities Kingston.

Crawford said because local providers’ rates are adjusted every six months by the Ontario Energy Boards, gambling on the set price of an independent provider can be appealing.

“They’re offering a stability factor,” he said, adding that these businesses can purchase energy from the either same generator used by local utility providers, or an independent source.

The Ontario Energy Board publishes data on the complaints lodged by Ontario energy consumers. According to a report published yesterday, there were 1,769 complaints lodged between April and June of 2010.

Over 1,000 of the complaints were regarding the way an independent energy retailer handled a contract and 370 regarded the conduct of a door-to-door salesperson. Only 300 complaints were lodged against a local utility provider.

“I don’t think we can call it a scam, to be honest, because they are legitimate businesses,” Crawford said. “We just want to make sure people have read everything first and are comfortable with everything [before signing a contract].”

He said issues between consumers and independent energy retailers usually arise over confusion surrounding the agreement made at the door.

“There’s been three or four cases in the last couple years where fines have been levied against companies for conduct having to do with their sales agents,” Crawford said. “It may have been about how contracts were entered into or how they were presented. But the companies themselves and what they’re offering is legitimate and legal.”

Gaegana Girardi is responsible with co-ordinating the training of sales agents from Summitt Energy—an Ontario energy retailer. She said Summitt Energy salespeople are trained by a third-party agency and paid on commission.

“We design the training for them and it involves both in-class training and in-field training,” Girardi said, adding the training lasts about three days.

“Pay is commission-based,” she said. “It’s typical in our industry to pay agents by commission.”

After a contract is signed at the door, the energy retailer is required by law to allow the customer a 10-day “cooling” period. During the period the company isn’t allowed a follow-up call and the customer can back-out without reason. After the 10 days elapse, companies must call to verify the contract. The door-to-door Summitt Energy salesperson isn’t paid unless the contract survives the process, Girardi said.

“We have from the 11th day to the 60th day after signing to contact you to verify the contract.”

Despite negative reports, Warren Mabee, the director of Queen’s Institute for Energy and Environmental Policy, said that while some energy retail programs may be scams, others provide renewable, green energy as an alternative to the local provider.

“Many if not most of them are completely up front and legitimate businesses,” said Mabee, who’s also an assistant professor with Queen’s policy studies. “It’s a scam if you don’t understand what it is that you’re signing up for.”

Mabee said if door-to-door sales agents are offering something beneficial to the person who’s door they knocked on, they won’t use pressure to make the sale.

“Pushy sales tactics should always be a sign that something is not right,” he said. “In some cases it may be beneficial if the fixed rate that they’re offering is significantly lower than the rate that you’ve been paying but that requires the consumer to have a pretty good idea of what their bills have been over time.

“If they come to your house and say, ‘well I can give you this discount but you’ve got to sign right now.’ That’s always a sign to me that they don’t want me to take my time,” Mabee said. “They don’t want me to look at the options and crunch a spread sheet or to do any of that work ­­— which is really what you’d have to do to understand that you’re getting a benefit.”

Michael Brennan has been working as a door-to-door salesperson in the Student Ghetto for six months solely on commission. He said sales agents for energy retailers work on a format.

“You start by introducing yourself and the company that you represent,” Brennan said, adding that he was instructed never to solicit after 9 p.m. and he doesn’t enter a home unless invited.

After introducing himself and the company, he explains the offer. Then he asks to see an invoice or the most recent copy of a utility bill.

“[It’s] to make sure that if they do wish to continue that they’re not going to acquire any kind of exit fee or penalty if they do already have a supplier set up,” he said.

Because Brennan works for an energy reseller that offers market rates on green energy, he’s forbidden to promise the customer they’ll save money.

“It says right on the top line of our essential agreements form that there is absolutely no guarantee of financial savings,” he said. “We simply just come by to give them the opportunity to stabilize their rate, so it would be one flat rate each month for the entire day rather than paying the time of use.”

Brennan said he requires customers to sign a contract at the door because it’s the most efficient way to switch a consumer over to a new provider.

“We try to get on it as fast as possible so we can get the benefit of the program.”

Despite a reliance on commission, Brennan said he doesn’t use pressure tactics.

“It’s completely up to the individual,” he said.

With files from Tyler Ball

Top five complaints about energy companies

1. No copy of contract: Consumer doesn’t recall signing contract; copy of contract not provided when requested.

2. Reaffirmation: Company tries to reaffirm during legally required 10-day cooling period.

3. Renewal: Misleading renewal notice; company renewed contract after customer made cancellation request.

4. Misrepresentation of identity: Agent claimed affiliation with government, local utility provider or Ontario Energy board.

5. Miscellaneous contract issues.

Ontario Energy Board

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