Utilities (Mis-selling)
The final item of business is a members' business debate on motion S1M-3486, in the name of Mr Duncan McNeil, on the mis-selling of utilities. The debate will be concluded without any question being put, and I invite members who wish to participate in the debate to press their request-to-speak buttons now.
Motion debated,
That the Parliament notes the proposal of energy regulator, Ofgem, to penalise London Electricity for failing to prevent its sales staff from mis-selling products to customers; expresses concern over the high-pressure selling tactics employed by representatives of certain utility companies; believes that vulnerable members of the public are entitled to protection from such practices; seeks clarification over what safeguards are currently in place and how these are enforced, and considers that the industry, the Scottish Executive and all interested parties should undertake a concerted effort to put an end to underhand sales practices and restore public confidence in the utilities market.
I thank those who have signed the motion and those who have stayed behind for tonight's debate. I am confident that the fact that many members have remained in the chamber is testimony to their genuine interest in the issue and has nothing at all to do with their trying to avoid the cold callers who night after night interrupt their tea with promises of untold riches if they change their gas or electricity supplier. I hope that they find attending tonight's debate slightly better than doing an impression of the poor woman in the advert hiding in a cupboard under the stairs because she is frightened of the doorbell ringing. However, the lengths to which we will all go to avoid utility companies' sales agents suggest how low the utilities market has sunk in the public eye.
I make it clear at the outset that there is no doubt that people, particularly those on fixed incomes, can benefit from competition in the energy market. However, given some of the underhand doorstep selling tactics that are being used, it is no wonder that the industry has been brought into disrepute. We have all heard stories of aggressive, high-pressure selling, of sales agents tricking people into signing transfer agreements and of salesmen sitting in the public library with the electoral register filling out their forms. Such stories have understandably turned people off.
I have also heard stories from the other side of the doorstep. One former salesman shocked me with his account of the sharp practices that he was forced to employ to cajole customers into switching suppliers. He made a number of serious allegations, including that he was given, without any police vetting, a fake identification card. I demanded that those allegations be fully investigated and I am thankful that the minister has informed me that his office has contacted the industry regulator and that the company in question is now under investigation.
Many in the chamber tonight could recount horror stories. It is easy enough to do that, but the key question is what we can do about the problem. I suggest the endorsement of three points. First, the industry watchdog, energywatch, as many members will be aware, is calling for the introduction of automatic minimum compensation payments for all cases of mis-selling and erroneous transfer. I back that measure. After all, if the energy companies are, as they say they are, in no mood to tolerate mis-selling and are driving it out of the industry, how could they possibly object? What better way is there for the companies to rebuild trust than by putting their money where their mouth is?
Secondly, I welcome initiatives such as EnergySure, which for the first time officially recognises and accredits energy sales teams. However, to concentrate on individual salespeople, however abusive or unscrupulous they might be, misses the bigger point. Earlier, I touched on the fact that some sales agencies that are subcontracted by the bigger power companies put their employees under intolerable pressure to hit targets. It is reported that such pressure can include telling employees to exaggerate or even lie about projected savings or encouraging them to sneak past wardens into sheltered housing complexes and to knock on doors after 8 o'clock, in breach of industry rules. An employer who treats workers in such a way is hardly likely to be concerned about an employee losing his or her job. Of course, when things go wrong, all the parties can blame one another. Therefore, I call on the power companies to take the next step, to recognise that the protection of the customer is paramount and to move away from using arm's-length agencies towards having accountable, in-house sales teams. That is the least that they can do.
Finally, we should consider what direct pressure we can apply on the power companies. Power companies are the partners with which we are delivering important anti-fuel-poverty schemes in Scotland, such as the warm deal and free central heating. How to square a company that works to reduce fuel poverty on the one hand and manipulates and exploits those on low incomes on the other hand is beyond me.
Gas and electricity companies have an obligation under condition 25 of their licence to produce information and advice on energy efficiency. I suggest that, if they put information and advice at the forefront of their advertising campaigns rather than use discredited doorstep selling, perhaps they could repair the damage that has been done to their reputations. If we cannot trust them on the doorstep or on the telephone, how can we trust them on any energy efficiency advice that they give? How can we trust any scheme—even schemes that are run by the Executive—if companies that use sharp practices are involved? Mis-selling risks undermining the Executive's groundbreaking policies on fuel poverty.
I ask the minister to demand that companies stop undermining the Executive's work and face up to their licence obligations. Restoring faith in the energy market is in all our interests. If we hear nothing but horror stories about people being transferred without their knowledge or being bullied into signing a form that they have not read, who in their right mind would think about changing a supplier? That image of the industry will not only make it harder for energy companies to attract new customers, but discourage consumers from using the market to find the deal that is right for them. It is high time that all interested parties—the power companies, the consumer groups, the Executive and others—got round the table and made a concerted effort to drive out underhand sales practices once and for all. The industry needs safeguards and the public demand action.
Speeches should be restricted to three to four minutes.
I am pleased to speak in a debate on an issue that has caused great concern and distress to many Scots, particularly to the elderly and vulnerable. I congratulate Duncan McNeil on securing the debate and on his excellent speech.
Mis-selling and fuel-supplier transfers in particular are frequently discussed by the cross-party group in the Scottish Parliament on consumer issues. Indeed, last June, we had a presentation from the managing director of a company that employs door-to-door sales representatives. He talked about the pressure that disreputable companies place on their sales staff, as Duncan McNeil said. Often, sales staff who are found to have mis-sold are dismissed by their employers, but apparently they regularly resurface with other companies. Reputable supply companies should ensure that direct sales companies blacklist those who fall into that category and drive them from the marketplace. Of course, we should also investigate companies that encourage sharp practice but throw up their hands in horror and blame their staff when they are caught out.
If companies do not get their act together, perhaps suppliers should consider whether they want their reputations sullied and fines imposed on them, such as the £2 million penalty that was recently imposed on London Electricity for continuing to work with the rogue companies. In a competitive market, salespeople are, of course, paid by results and often earn 100 per cent of their income from commission, which encourages the cutting of corners at best and downright fraud at worst.
Complaints continue to mount. Last year, Citizens Advice Scotland reported a 33 per cent increase in utility problems—some 8,200 cases. Those constitute 9 per cent of all Citizens Advice Scotland's social policy cases and more than half of them relate directly to problems arising from fuel transfer. The work load of citizens advice bureaux continues to increase in that sphere.
Enforcing licensing conditions, implementing the new code of practice and working with energywatch are important steps. Compensation for those who have endured mis-selling might also focus minds and hit rogue sellers where it hurts financially. I support Duncan McNeil's comments on that issue. However, the announcement by the Minister of State for Energy and Construction that rogue companies must crack down on mis-selling or face penalties has not yet had the desired effect, according to Citizens Advice Scotland. Perhaps last month's action by the regulator will make those companies think again.
Of course, we should take into account the fact that many people who transfer to another fuel supplier benefit financially. However, the fact that many of Scotland's poor are excluded from the opportunity to switch and benefit is the other side of the coin. We could debate that another time.
Another issue is that thousands of people who genuinely wished to transfer suppliers filled in forms and had them accepted. However, those forms were incinerated—and so could not be processed—because of the incompetence of some of the supplier companies. Therefore, there is the ridiculous situation in which some people are harassed and distressed by being mis-sold utilities, while others who genuinely want to transfer are being prevented from doing so. Restoration of public confidence in the sector is vital and I look forward to hearing the minister's response.
I congratulate Duncan McNeil on securing this timely debate on utilities. I know that action is being taken at the United Kingdom level by the Minister of State for Energy and Construction, Brian Wilson. However, it is important that the Scottish Parliament focuses on the issue. Duncan McNeil gave us an excellent overview when he kicked off the debate.
I have campaigned on the issue of erroneous transfer and the mis-selling of utilities for some time. In a motion that I lodged earlier this year, I suggested that compensation should be paid to customers if energy suppliers are at fault. Something must be done to concentrate the collective corporate mind of energy companies. I know that the most frequent complaint that energywatch Scotland receives is from consumers whose electricity or gas supply has been taken over by another company without their consent.
I have been contacted by many constituents about the mis-selling and erroneous transfer of utilities, which continue to cause unnecessary distress to many vulnerable people. Nobody is saying that companies cannot market or sell their products, but underhand tactics are simply not acceptable. I have heard countless examples of people being transferred without their knowledge or being bullied into signing a form that they have not understood because of the small print that is hidden at the bottom.
From personal experience, I know how irritating and difficult it is to resolve an erroneous transfer of supply, because the power companies do not believe that anyone has been transferred erroneously. They just read their papers and say, "No, you have been transferred. Here's your new bill." Duncan McNeil spoke about public confidence in the industry. He is right to say that the mis-selling of utilities and erroneous transfers will hit the power companies hard unless action is taken to restore public confidence in the industry.
That is why I welcome the Office of Gas and Electricity Markets' recent £2 million financial penalty on London Electricity for serious breaches of its licence conditions relating to the marketing of its products. That is the right way forward. However, I also want us to move to a situation in which customers are compensated when the energy companies are at fault.
I, too, have experienced someone from an electricity company on my doorstep pretending that they had been subcontracted to read my gas meter. I began to think that I had been targeted, because the same thing has happened to me in two different flats during the past few years. I refused to let the person across the doorstep, because I am quite assertive and was quite sure that the gas company had not subcontracted the work. I phoned up the gas company later and was assured that, indeed, it had not done so. I was not taken in by the person because I had read about such incidents before and was determined to follow my suspicion through. Even so, I could not believe that the situation was happening to me.
I know that many of my constituents are not as assertive as I am and find it difficult to shut the door on an assertive salesperson who is trying to finagle their way into the house. Particularly in relation to older people, that kind of treatment is an absolute scandal.
I am angry that my constituents are being treated in such a manner by the power companies. I support Duncan McNeil's initiative in highlighting the issue in the Parliament and calling for strong, co-ordinated action to stamp out such practices. If public confidence in the utilities companies is not to collapse, we need action and we need to broadcast the fact that action is being taken.
I was keen to speak in the debate not only to raise the concerns of my constituents, but to focus the discussion on action that needs to be taken in partnership by the UK Government and the Scottish Executive. That is why I have backed the call for all parties to get round the table and make a concerted effort to drive underhand sales practices out of the industry. Those practices are unacceptable and have to stop.
I welcome Duncan McNeil's motion, although I have questions about some of its contents. The £2 million fine that was placed on London Electricity sounds fine, but I would like automatic compensation for consumers. Where is that fine going? Will it go into the coffers of Ofgem or will it find its way back to the consumer?
Like others, I find that my knowledge of the subject is based on things that have happened to my constituents. The issue that has affected my constituents most relates to fraudulent signatures. The companies do no checks, whether they are gaining or losing the customer. Nothing is done to check that the consumer wants to change supplier.
In 2001, when I took the matter up with Ofgem, I was told that that sort of fraud did not happen often. Ofgem was totally out of touch with the situation, although I recognise that it has now come up to date. It is a pity that it did not grasp the nettle earlier. At the time, I suggested to Ofgem that, when a company received forms from a salesman suggesting that the consumer had requested the transfer, the company should check whether the signatures were valid. Ofgem told me that that would add more bureaucracy to an already complicated system.
However, the problems that are faced by a consumer who has been wrongly transferred and tries to get the situation redressed far outweigh any bureaucratic inconvenience that the second check would cause the companies. I still think that Ofgem could act in the way that I suggest and bring relief to consumers.
I resent the fact that, although privatisation of the power industry—which I recognise might still be a controversial issue—has brought considerable benefits with regard to costs to the consumer, the mess that has been created by the changing of suppliers against the wishes of consumers is preventing the elderly in particular from benefiting from the options that competition is creating in the power market. It is not only the elderly who are affected in that way. My colleague Mary Scanlon suffered from a false change of supplier. She is not someone who is elderly and confused; she is simply someone who was deliberately cheated.
I would welcome the automatic compensation that is suggested by energywatch and supported by Duncan McNeil. If our minister can do anything to press Brian Wilson into following that line, he will have done a considerable service to all consumers in Scotland and probably further afield.
I congratulate Duncan McNeil on securing the debate, which is timely. Anyone who is prepared to tackle ex-boilermaker Duncan McNeil on any subject—especially a subject that touches people, such as this one does—does so at their peril.
I will quote Ian Fleming, who, in one of the James Bond books, said:
"Once is happenstance. Twice is coincidence. The third time it's enemy action."
I bring to members today a tale of enemy action. I had great difficulty in preparing for the debate, because I could select only a few of the cases from my considerable file on the subject in my constituency office.
I will start with St Fergus church hall. Unlike the cases that members have mentioned so far, this happened over the telephone. St Fergus is in a rural constituency. To send people to chap the doors there is expensive and more difficult, and most utilities sales are therefore done by telephone canvassing. A call to the hall-keeper of St Fergus church hall led her to ask for a quotation. The result was that Scottish Gas transferred the church hall from its Scottish Hydro-Electric supplier.
The second case is Mrs B—I will not give her full name—in Maud. She received a letter, again after a marketing telephone call, indicating that her electricity supply would be transferred from Scottish Hydro-Electric to Scottish Gas. After my intervention, she received a letter from Scottish Gas resolving the issue on 14 August. Seven days later, Scottish Gas transferred her again—this time without even the courtesy of a telephone call.
The administrative systems in some of the utility companies are under considerable stress. In some respects, that is because of the competition from new entrants in the market and the urgent, belated response from the sitting tenants, as we shall call them. Mrs B's case resulted in a reference to the British Gas board. It has gone to a very serious level.
However, it was time to play double or quits. My own constituency office received a phone call making an offer. My constituency office manager requested a quotation, and within two weeks Scottish Gas had transferred even an MSP's constituency office gas supply. That made The Press and Journal and certainly made Scottish Gas sit up and pay attention.
I have an 80-year-old constituent in Fraserburgh who has had his electricity supply transferred on two separate occasions to two separate companies. I have only dipped into the file to pick a few random examples that are geographically representative of my constituency. The problem affects real people and causes real irritation. It is not just salespeople chapping the door; it happens through the telephone as well.
I have written to Ofgem and had a reply. Ofgem points out that it is a condition that suppliers carry out audits of all their sales and that they record the telephone calls. I have heard the script of some of the cases concerned. Unambiguously, there was no question but that transfers were not being made. The pressure on some of those involved in cases of mis-selling to personal and business customers is clearly unreasonable and untenable.
I will close with a final irony. Scottish Gas is fixing the problem—I am reasonably content about that—but, because my constituency is a rural area, many of my constituents whose electricity has been transferred to Scottish Gas cannot even receive gas from Scottish Gas. Is that not the final irony?
I congratulate Duncan McNeil on securing the debate and on his motion. I echo his comments on the potential benefits of competition but also the serious problem of high-pressure sales techniques, which often border on, and occasionally tip over into being, downright criminal.
I have been concerned about the issue for some time, since a constituent came to my surgery more than a year ago and told me how his 88-year-old mother had been mistakenly transferred from one supplier to another. After months of wrangling, my constituent was still being told different things by different companies. He wrote to me:
"for the last 3 months the company involved in the erroneous transfer have said they have returned her account to the original supplier. The original supplier states that this has not happened. How is an 88 year old lady with dementia meant to deal with this?"
That question apart, we have heard that two of our female colleagues—who are well known for not suffering from dementia and for being quite assertive—have had to deal with the problem; we all have family and friends who have had to deal with it. Many of my neighbours and constituents, including the gentleman whom I have quoted, have brought not only the matter of aggressive and misleading sales techniques, but that of forged signatures, to my attention.
I lodged some parliamentary questions about the issue some time ago, and was given one of those glib answers along the lines of, "It's a reserved matter—don't worry about it. Go off and think about all those other things we have to think about." It may be a reserved matter on paper, but the Executive could assist in a number of respects. Duncan McNeil was right to point out that we are dealing with companies in the context of central heating schemes, and it is surely in their best interests not to annoy us by getting it wrong in the other areas in which they work.
Margaret Smith said that the subject is reserved, but fraud is not a reserved matter; it is a law and order matter.
That is the other thing that I was going to say. Following the responses that I received to my questions, I then lodged a motion on the subject, which was followed by many others from members of all parties. It is significant that we have all picked up on the issue. In my motion, I was trying to find a way for the Executive to work with the Scottish energy companies and with the police to combat fraud and bogus-caller crime in general. I totally agree with Phil Gallie's point.
Although many of the measures that might be taken are reserved to Westminster, others are in the hands of such bodies as Ofgem. I am delighted that Ofgem decided to maintain the operating licensing conditions that it had in place beyond March this year, and that it toughened them. I am also delighted that Ofgem has now announced its intention to fine London Electricity £2 million for failing to prevent mis-selling by its sales staff. Unfortunately, we can expect to see some action from companies only when they start to get hit in their own pockets. I would like the companies concerned to have to pay proper compensation to consumers for the distress that is caused by their malpractice, as well as having to pay out to Ofgem.
It is a little ironic that London Electricity was one of the companies that has recently signed up to the Electricity Association's EnergySure pilot accreditation scheme to improve the training and accreditation of energy sales agents. It sounds as if that company's staff could do with it. Companies have to work proactively to retain customer confidence in the face of newspaper reports of bullying tactics and forged signatures and so on, so I welcome that scheme. Time will tell whether it proves to be beneficial.
In supporting Duncan McNeil's motion, I strongly urge the Executive to do all that it can to protect vulnerable members of the public from the practices that we have been describing, and to work with partners, including the Westminster Government, to ensure that we alleviate the problems as much as possible.
I echo the sentiments of many colleagues in congratulating Duncan McNeil on securing tonight's debate. As Duncan McNeil, Sarah Boyack and other members mentioned, this is an important and worrying issue. I suspect that many of us have particular concerns arising from individual cases in our constituencies. Those individual circumstances highlight more general points, and it is on those that Duncan McNeil's motion focuses. The motion deserves our support for that.
In my constituency, a clear pattern is emerging of elderly people in particular having real difficulties in navigating the sometimes conflicting information from competing suppliers and their claims of potential advantages—with little mention of the potential disadvantages of switching supplier.
This debate is not restricted to nefarious activities such as deliberate mis-selling, serious though those are. Only a brave man would interrupt Duncan McNeil's tea with a telephone call, but some people are very persistent.
There is a need not only for monitoring, but for continuing assessment of how competition is developing for consumers—particularly vulnerable consumers. I am pleased to hear members say that, when there is competition, we must ensure that the poorest and most vulnerable do not end up paying the highest fuel prices. That is a clear ambition of Labour members; I hope that it is shared by members of all parties. Working together with Ofgem and the Department of Trade and Industry, Scottish ministers must continue to measure how competition is working in the market and involve themselves in discussions about how regulation of competition is operating across the United Kingdom.
It is a no-brainer to say that transparent and readily understood information for consumers is needed as a baseline for ensuring efficient and effective competition. As Duncan McNeil indicated, without such information, consumer misinformation may act as a deterrent or barrier to effective competition.
We need to get the system right. As Duncan McNeil mentioned, it is likely that the Executive's current central heating programme—installing heating systems in pensioner households throughout Scotland—will increase the number of people who are potentially at risk of being affected by misinformation and mis-selling. If those customers move away from the tariffs that are offered by incumbent suppliers—or it is suggested that they do so—they need comprehensive yet understandable information about the technical requirements of their existing and new suppliers, and about pricing tariffs. They must be clearly informed about the implications for them of additional charges—for example, for meter changes or internal circuitry works.
I mentioned to Duncan McNeil the concern that I felt after visiting a pensioners lunch club, which a pleasant woman addressed in near evangelical style about the advantages of being supplied by a particular company. At no point in her presentation did she mention that people might want to check with a qualified electrician what needed to be done and the costs of changing meters. I did not miss the opportunity to take the woman concerned to task on those issues, in relation to which pensioners need particular support.
Protections for vulnerable consumers and—as Duncan McNeil indicated—penalties for offenders are needed. I trust that the minister will make it clear that when members—certainly Labour members—are asked on behalf of vulnerable consumers where we stand on this issue, we say that we are on their side.
I, too, congratulate Duncan McNeil on securing the debate and on his speech. I agree with every one of his recommendations. It is a rare event in this chamber for us to be united to such a degree. Phil Gallie, Brian Fitzpatrick, Duncan McNeil and I are all on the same side of the argument. It is important that we speak with one voice. A loud, clear message should go out from the Scottish Parliament that we are united in our support for the consumer.
We all have tales from our constituencies of people—especially older people and people suffering from early senile dementia—who have been victims of the mis-selling of utilities. Several such cases have been cited this evening. Rather than cite more examples of the problem, I would like to refer to three aspects of what should be the solution.
First, we need to consider the possibility of making independent advice readily available to people who have been approached by salespeople. I refer not just to salespeople who are involved in mis-selling, but to those who are genuinely selling an alternative method of energy supply.
There should be an easy and readily accessible source of independent advice. The points that Brian Fitzpatrick raised in his speech in themselves justify the need for such independent advisory services to be available. I had a phone call last week from Scottish Gas asking me to change from Scottish Power to Scottish Gas. I would not have known the technicalities to which Brian Fitzpatrick referred and I cannot think of any organisation that I could readily have phoned to get advice to enable me to make an informed decision. We need to consider the possibility of that kind of advice being available and perhaps having the producer organisations fund it.
Secondly, we should consider the need for a register, so that, as with land, every time that a change in power provider takes place, the company that takes over has to register the change. That would allow the regulator at least to monitor what is going on, perhaps initially on a pilot basis. We should certainly hold that in contingency if the power companies refuse to adhere to what Ofgem has declared and to the voices of this Parliament and, no doubt, the Westminster Parliament.
A couple of months ago, the director general of Ofgem, Callum McCarthy, was before the Enterprise and Lifelong Learning Committee. Brian Fitzpatrick and I both raised the issue with him and I hope that we can claim some credit for the recent changes that Ofgem has made in regulation—even if we cannot, we will.
My final point is on the definition of utilities. Inevitably tonight we have concentrated on gas and electricity, which are the energy utilities, but there is a similar problem in relation to the telephone companies, particularly with new companies coming into the market allegedly selling low-cost deals on calls. It seems to me that there is scope for us to send a message to Westminster that the new UK Communications Bill could have built into it additional safeguards for the consumers of telephone utilities.
I make those points in a positive manner, in the hope that the minister will at least consider them.
And knowing that Alex Neil will subsequently take the credit.
I congratulate Duncan McNeil on securing the debate and on providing an opportunity for broad and useful discussion of such an important issue. Members have commented on the numbers of cases that have been raised throughout Scotland in urban and rural areas, but the sheer volume of cases is not the main reason for concern. We must also consider the consequences of mis-selling, such as the inconvenience, uncertainty and distress that such practices cause consumers, particularly vulnerable consumers, which a number of members mentioned. As Duncan McNeil described so graphically at the outset, those practices also undermine confidence in the energy industries.
The regulation of utilities is indeed a reserved matter, but it is also a matter of great consequence to all our constituents. That is why there has been such support for this evening's debate and for the view that Duncan McNeil expressed so clearly at the beginning, which is that mis-selling must be stamped out. Although many of the measures that are in place are Westminster's responsibility, I will start by rehearsing the safeguards that exist to protect consumers.
Brian Fitzpatrick asked how much we monitor the development of the market and competition. It is worth saying that since competition in domestic utility markets was introduced, there has been a good deal of movement within the market. About 7,000,000 out of about 20,000,000 gas consumers and 10,000,000 out of 30,000,000 electricity consumers—a third in each case—have changed their suppliers. The latest figures show that the number of transfers is still running at 750,000 consumers a year. That happens because of the benefits that people can acquire by changing supplier. Although it is important that we bear that in mind, we do not want competition alone—we want consumers' rights to be protected, too.
I mentioned existing means of protecting consumers' rights, some of which lie in criminal law and some of which lie in general consumer protection legislation. The industry regulator, Ofgem, and the consumer watchdog, energywatch, have specific powers in that regard. Other regulations are specific to the gas and electricity industries; they take the form of conditions in supply licences, which govern sales and marketing on the doorstep, over the phone and in the shopping centre. Among other stipulations, they include clear rules on selection and training of sales staff and auditing of sales.
Although those regulations were introduced some time ago, Ofgem has extended and developed them several times, which reflects its concern about the continuing practice of mis-selling in the marketplace. Most significant is that, as I think Kenny Gibson and Sarah Boyack mentioned, Ofgem acquired in April a new power to impose a fine of up to 10 per cent of turnover on a company that is guilty of breaching the licence conditions. Ofgem is already considering whether further new powers might be required to allow those conditions to operate more effectively. The first use of the power that Ofgem acquired in April was made in October. It is highly significant that a financial penalty of £2 million was imposed on London Electricity and its affiliate company Virgin HomeEnergy for failing to prevent mis-selling of gas and electricity to domestic consumers.
Does the minister have any idea where that money went?
The fine has not yet been collected. I will write to Mr Gallie about that. I noted his point that it would be good if the imposition of the fine produced a direct benefit for consumers. The purpose of the fine is to produce such a benefit by highlighting to the supply companies the consequences of failing to stick to their licence conditions.
Members might be aware that Ofgem confirmed the imposition of the fine on Monday, after considering representations in the interim period. In doing so, Ofgem indicated that all the representations that it had received provided strong support for its tough action. I want to add the Scottish Executive's support for that tough action. I also want to intimate our support for the work of energywatch in standing up for consumers. Several members have said that the consumer must be put at the centre of such considerations.
Several members—Duncan McNeil in particular—made the point that the energy companies whose agents sell gas and electricity on the doorsteps are our partners in promoting energy efficiency and warmer homes. That is why we look to energywatch to bring those companies on board and to ensure that they take their social responsibilities seriously not just in one area of policy, but across the board.
Earlier this year, energywatch launched its "Stop Now!" initiative, which is directed at mis-selling. The initiative brings together the suppliers, energywatch, Ofgem and the Department of Trade and Industry to discuss the problems of mis-selling and to identify possible solutions. That has resulted in the piloting by a number of companies—including Scottish Power—of EnergySure, which is a new effort to promote best practice in energy selling. There are two aspects to EnergySure: the training processes of participating companies will be audited to ensure that they reach approved standards and a national database of accredited agents will be established. If an agent's performance falls below the required standard, that agent will not be permitted to continue to sell without undergoing retraining and demonstrating that they are fit to work in the industry.
In addition, the Office of Fair Trading launched an investigation into doorstep selling earlier this month, which will examine not only gas and electricity, but other commodities that are sold on the doorstep. It will seek to identify why the selling of some of those commodities causes the kind of problems that we have heard about during the debate and why the selling of others does not. The aim is to identify what causes such problems and how that can best be addressed.
Automatic compensation payments for the victims of mis-selling are on the agenda. Duncan McNeil and Phil Gallie raised that issue. The energy selling steering group, which includes suppliers, regulators and energywatch, is considering such proposals and is drawing up a code of practice to govern suppliers' contracts with customers. The group will also consider how proper checks might be introduced into the transfer process. I very much look forward to the proposals that the energy selling steering group will make when it concludes its considerations.
In summary, I can confirm our view that the practice of mis-selling is unacceptable, as are its consequences. We will continue to support the work of Ofgem, which strengthens market regulation, and the work of energywatch, which advises and supports consumers. We will also continue to encourage the industry to face up to the problem by continuing to engage in schemes such as EnergySure to eradicate the menace of mis-selling.
To consumers and to the constituents who have been represented in the chamber tonight, we convey the clear message that we are on their side and that we intend to ensure that the problem is cracked. Following this evening's debate, I will write to Ofgem and to the energy selling steering group to draw to their attention the concerns that have been expressed by members from around the chamber.
Meeting closed at 17:46.