Door to Door Energy Sales: Are You Being Scammed?
Knock, knock... who's there?
Have you been bothered by a sales agent representing a retail energy provider recently? While somewhat less common in recent years, door-to-door sales are unfortunately still a common practice among both electricity and gas marketers throughout the US. While sales representatives promise big savings, many customers have found the opposite. Find out more about door-to-door energy sales and whether it's a good idea to sign a contract at the door.
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Door-to-Door Sales: Always a Bad Idea?
Selling energy contracts at the door is permitted in many states where electricity and/or gas markets have been deregulated for residential customers. While there are many complaints about door-to-door sales, it is important to recognize that not all door-to-door salespeople are dishonest. Some sales agents are upfront and honest, and many retail energy providers are able to provide savings. But we often don't hear about positive experiences with door-to-door sales because most people are only inclined to make negative reviews public.
That being said, in general we do not recommend signing an energy contract at the door. Why? When you sign an energy contract at the door - unless you are an energy expert who knows already your exact monthly consumption along with all of the other offers on the market (somewhat unlikely!) - you won't have had the time to compare all of your options and know that you've made the right choice. If an energy salesperson comes to your door and tries to get you to sign a contract, you should ask them to leave the information about the contract in writing so that you can think about it some more before signing. With most fixed rate plans ranging from one to two years, your choice of energy supplier shouldn't be a snap decision!
Door-to-Door Energy Contracts: Consumer Protection
Most state energy regulators have put in place specific regulation regarding door-to-door sales. These typically include requirements such as:
- Sales agents' clothing must clearly identify which retail energy provider they are working for, and all sales agents must carry an identification badge with their full name
- Sales agents must not impersonate the local utility or historical (incumbent) supplier
- Door-to-door sales agents must follow all information disclosure rules that are normally a part of the state's energy marketing requirements
- Recording requirements (e.g. the agent must audio record the conversation)
Many state energy regulators also have outlined the hours during the day during which door-to-door salespeople and telemarketers are allowed to contact potential customers. Your local municipality may also have outlined rules for door-to-door sales. If you have had an unpleasant experience with door-to-door sales, you should contact your state energy regulation agency and/or consumer protection agency to find out whether they violated local rules.
Common Energy Door-to-Door Scams
Unfortunately there have been several energy retail companies that have been found to use misleading sales tactics. Watch out for the following lines, and don't sign a contract if you hear any one of the following lines:
- "I'm working on behalf of your utility. Can I take a look at your electricity/gas bill so that I can make sure that you aren't paying too high of a rate?" or "I can get you a rebate on your bill"
Do not show your current electricity or gas bill to any energy sales representatives who knock at your door. If you hear this line, you should request to see identification (such as a business card or a badge) so that you can verify the person's identity.
- "I'm doing a survey for ____ (government or company). Can I ask you a few questions?"
As a matter of course you should always ask for identification from people knocking on your door.
- "We have a sale/special price on our energy rates that ends tomorrow."
The salesperson may be trying to pressure you into signing a contract, and the price listed may actually be the standard price
- "We'll give you a good deal if you we can use you in our advertising"
Again, the salesperson may be trying to pressure you into signing a contract, and the "good deal" listed may not actually be any different from the standard price
How to Avoid Getting Scammed
Here at CallMePower.com, we have a wealth of information regarding your electricity and natural gas bills, including tips on how to compare energy suppliers. If you are interested in switching suppliers, or if you are moving to an area where electricity and/or gas are deregulated, we recommend that you check out the rest of our website, or call us at 832-460-0233 to find the electricity or gas option that works best for you.
There are a few things that you can do to avoid getting scammed if a representative of an alternate supplier knocks at your door. First of all, make sure that everybody in your household knows who is capable of making decisions about your energy supply. Also, don't show your bill to just anyone! Make sure to ask for some identification so that you know who you're talking to. Along with watching out for any of the common energy door-to-door scam lines that we've listed above, make sure to ask about the following if an energy salesperson comes to your door:
- How long do I have to change my mind without paying a cancellation fee?
- Does this price include a base charge? Is there a minimum usage fee if I consume less electricity?
- How much is the cancellation fee (early exit fee)?
- What are the late payment charges?
- Is a security deposit required? If so, when and how will I get it back?
- If any of the current services they are proposing would affect any current services that I have (e.g. renting a water furnace)?
- Will I have to pay a fee to switch from my current supplier and/or an activation fee to start a new account?
Finally, don't feel pressured to sign a contract on the spot. Ask to keep a copy of the contract, the terms and conditions, and all supporting document so that you have time to read them over and think about it carefully. Your energy supply is an important part of your monthly budget and often a long-term decision - you don't need to make a decision quickly!