NMa imposes fines on two Dutch energy providers for door-to-door-selling practices

Thursday, 24 March 2011

The Netherlands Competition Authority (‘NMa’) imposed fines on two Dutch energy providers for customer-recruitment methods they used in early 2010, involving door-to-door selling. Energy provider Greenchoice is fined more than EUR 2 million, while energie:direct is fined more than EUR 1 million. Many consumers were not aware that they were actually agreeing to switching energy providers. The consumers thought that they were agreeing to receiving a discount on their energy bills from their current providers or to receiving an information packet. 

‘Play by the rules’

Door-to-door selling in itself is a good way to recruit new customers. However, when companies use this method, it is important that everybody plays by the rules. Consumers must be able to trust the offers energy companies give them. That is why the NMa is taking firm action in this case. It is in everybody’s interest that the energy market continues to be dynamic. The NMa believes that fair competition is a critical condition for a dynamic market. The level of the fines already reflects the measures that both companies have taken in order to prevent future violations.

Violations are not accidental

In January 2010, Dutch consumer show ‘Kassa’ reported extensively on the door-to-door sales methods of energy companies. In January 2010 the NMa and the Dutch Consumer Authority (‘CA’) opened an online complaints office regarding door-to-door selling. The authorities were triggered by the various indications they received about potential abuses regarding to door-to-door sales practices by energy companies.

As a result of these indications, both the NMa and the CA started investigations. The NMa found out that the violations at Greenchoice and energie:direct did not involve a couple of customer-recruitment sales pitches that have accidentally gone wrong. However, the NMa found out that they were actually involved in situations that were far more serious. Many consumers were not aware that they were actually signing a contract with another energy provider. In addition, these companies failed to inform these consumers about important conditions of the contract on, for example, contract duration and cancellation options. The CA will be finishing its investigation soon.