Inside the world of Npowers rogue sales teams

Inside the world of Npowers rogue sales teams 

06/04/2008

The Times

THE salesman lowered his voice conspiratorially and shot a glance around to check nobody was listening. Aneel Khan, a 25-year-old acting manager, wanted a private word with the young female recruit before him.

He clearly felt the recruit, fresh from a training course on door-to-door selling techniques, needed to be told how to approach customers in the real world outside the classroom.

Leaning closer, he said Okay, two things whatever Im doing here you dont have to discuss with anyone else, because if youre going to be very honest we cant sell anything. Without waiting for this to sink in, he went on quickly. He said the recruit must get residents to sign contracts agreeing to change their supplier of gas and electricity using whatever means necessary. You have to tell them a few things which we arent really offering, but after signing it youll have to tell them everything. If Im going to say [the truth] before signing it, nobody will [be] going to sign it. Khan cut a distinctive figure, his bright red shirt standing out against the grey tower blocks in the south London street. The shirt is the uniform of Npower, one of Britains biggest ener gy companies, which has been growing at a rate of more than 450 customers a day.

Much of the expansion is down to the efforts of people like him. Over the course of the next few hours and days, he proceeded to show exactly how he had achieved his position within the company by relentlessly lying to everyone to whom he was selling. Nor was Khan the only such salesperson. Almost every Npower sales rep the newly recruited woman came into contact with behaved in a similar fashion.

Unfortunately for them, the new female recruit was an undercover reporter for The Sunday Times. She had joined Npower a week earlier to uncover the methods used by a company that has more than 6m customers.

The reporter had good reason to investigate. While Npower increased its profits from 403m to 571m last year, the company is also developing an unfortunate reputation. Npower is the worst performer in so many categories, said Adam Scorer, campaigns manager for Energywatch, the consumer watchdog. It comes bottom for disconnecting customers, for not helping poorer customers and for discrepancies between tariffs. Perhaps most worrying of all, Npower has the worst record when it comes to complaints about mis-selling on the doorstep. In the past five months Energywatch has been contacted by 429 people complaining about Npowers direct selling techniques. The figure was two-thirds more than the number of complaints for the next highest company.

Because of the complicated system by which such complaints are processed, only a small percentage have been officially logged as formal complaints. The others are referred back to the company. Scorer believes, however, the number of people who actually call us is just the tip of the iceberg. Mis-selling by utility companies is not a new phenomenon, but for years it has been considered, by the industry at least, a problem of the past.

It first emerged after the deregulation of the energy supplying industry in the late 1990s. In the resulting climate of fierce competition a number of companies salespeople misled customers as to their products and even their identities.

Three years after The Sunday Times first exposed the issue in 2000, a clamour for action resulted in a code of practice for face-to-face marketing being brought in by the Association of Energy Suppliers.

The code required, among other things, salespeople always to identify themselves clearly to potential customers and to explain what they were offering. They also must not exploit a persons inexperience, vulnerability, credulity or loyalties, it says. Giving out misleading information over potential savings is particularly to be avoided.

Last year 5m customers in Britain were persuaded to change supplier, the highest figure since 2002, which was heralded by Ofgem, an industry regulator, as evidence of market forces working well. However, a study by the University of East Anglia found a third of those changing were now actually worse off as a result.

At the same time, complaints about Npower mis-selling to customers have rocketed. Since August last year it has consistently topped the Energywatch mis-selling league.

So what was the truth behind the new wave of mis-selling, and is it true that Npowers sales staff are not to be trusted?

The reporter successfully applied to join the company as a sales adviser shortly before Easter. After a couple of interviews she was offered a position and told that her basic salary would be 11,000 a year, with commission on top.

This would accrue by signing up householders to become new customers. Depending on which utility and which precise package they sign for, an Npower sales rep could earn up to 134 for each customer. Their target was 40 sales a week.

Andy Warner, head of Npowers sales teams in London, later gave a motivational talk in which he made it clear what was expected. I would like it that you go out there, you work a few days, you dont try particularly hard, you go and have a nice life and you earn 50,000 a year while youre doing it . . . go out there, get on with it, do it and earn a fortune for all of us. First there was the training course, in which the reporter was taught to work in line with the code of conduct.

However, as soon as she was sent out into the streets of London to accompany a more experienced Npower salesperson, much of the training she had received was in effect thrown out of the window. She was told to shadow Steve Dempster, an award-winning and highly successful Npower salesman. One of the first things he said was What you hear me say to customers doesnt go anywhere, right? Dempster, who boasted that he earned 70,000 a year from working only two hours a day, three days a week, evidently did not want his sales secrets to get into the wrong hands.

The burly salesman then proceeded to demonstrate his standard doorstep pitch on residents in Hackney, east London. Hello, my love, electric board . . . Im from the electric board. Just to let you know weve taken over Tilbury and Dartford power stations. This was often accompanied by the phrase Im not a salesman, all right, Im not trying to sell you nothing. Only occasionally did he mention that he was working for Npower, although he usually wore the red company uniform and, as with all salespeople, a name badge around his neck with Npowers logo. However, not only was Dempster very much a salesman but it was entirely misleading to suggest that Npower, let alone the electric board, had taken over either Tilbury or Dartford power stations. Tilbury and Dartford (its correct name is Littlebrook) had been owned by Npower since inheriting them from the old Central Electricity Generating Board, a spokeswoman confirmed last week.

Having established the urgent nature of the pretext for his visit, Dempster then told each customer that they were paying too much money.

He randomly chose figures to throw at them. Since Npower owned the local power stations, the customers, who were nearly all using prepaid meter keycards topped up with cash at high street outlets, could save by signing with them, he said. Weve sold that to your supplier for 7, and they sell it to you for 10, he said, and then went on to imply they could sell it to householders for wholesale prices. What were going to do is . . . send you a new key, and youre going to put 7 on the key, in the future, and that will give you 10worth of kilowatts. On another occasion Dempster said the supplier bought the electricity for 8. However, Energywatch figures show that Npower is in fact the most expensive supplier of electricity on prepaid meters. An average annual bill for such a customer would be 440. The cheapest, E.on, is 393. After signing up a few new customers, Dempster showed that it was not only the householders who were being deluded. Every single word Im saying is true, he said when asked about his pitch. Thats why they cant get me. The next day, the reporter was tasked with accompanying Khan on his rounds. After his opening spiel, Khan showed that he was even less bothered about adhering to the truth than Dempster.

He also freely told householders in the Oval, south London, that he was from the electricity board but frequently went a step further and insisted this meant that his company owned all the others. Were coming from the electricity board, the board who controls all the companies, British Gas, EDF and Npower, right? he told one customer before giving him entirely fictitious figures about how much money he would save if he signed up. Yeah, but then Ill be with Npower, innit? said the woman, reading Khans name badge. No, the thing is youre already with us, right? said Khan. How am I already with you? Im on British Gas, came the reply. Because we are from the electricity board and British Gas work for us, said Khan. Khan threw varying and incorrect tariffs at customers, claiming they were on the wrong one and he would change it and save them hundreds of pounds. Are you trying to tell me I must join another company? asked one would-be customer. Khan replied Youre not going to join any other company. Asked what the catch was, Khan said there was none. Were just trying to save you money, simple as that, he said. In conversations with the reporter Khan confessed he knew what was he was doing was bad and not to tell anyone that he made up figures. He made it clear that whether or not the customer was saving money was irrelevant. When they use it [the gas or electricity] for one month, like eight weeks, seven weeks, were gonna get the commission. After that, if they cancel it, who cares? Later the reporter watched Rekhi Dey, a former sales rep for British Gas, who had recently switched to Npower, deceive a homeowner on her doorstep by telling her that if she switched suppliers she would no longer have to pay a standing charge and her prices would be fixed for the next three years.

In fact, the 2011 price freeze is available only to customers paying by direct debit, which the householder, Dainora Tribaldoviele, a Lithuanian, was not doing. Dey later admitted to the undercover reporter that she had lied. She said We have standing charges . . . dont worry about it. You could see that she was not able to speak good English . . . so you can just say there is no standing charges. She also admitted lying about the price freeze and said if the customer had been English, she might have lied, but would not have left any literature behind so that nobody could read the small print afterwards and then make a complaint.

Npower operates a two-tier complaints procedure. Minor indiscretions, which a spokesman said might be entering someones house with muddy feet, would result in a penalty point against the salesperson.

After accruing five points, the salesman would be subjected to some form of discipline, which might see them dismissed, or just retrained. Steve Conrad, a manager, told the undercover reporter that this process could last as little as 10 minutes. More serious offences would garner instant five-point penalties.

Richard Frost, an Npower spokesman, who insisted that the overall level of complaints against the company was quite modest, said the Sunday Times allegations would constitute five-point penalties. We are concerned, this doesnt happen every day of the week and we will basically shut down that sales team while we conduct a full investigation, he said. I feel betrayed, I was assured of saving money but my bill rose from 36 to 99 a month Dainora Tribaldoviele was tricked into switching to Npower by the saleswoman Rekhi Dey last week.

Tribaldoviele, whose family live in Hounslow, west London, was seen as a soft target by Dey because she is from Lithuania and not able to speak good English. Dey claimed she would not have to pay a standing charge for electricity if she swapped to an Npower meter keycard. This was untrue, as Dey later admitted to an undercover reporter. Dey also said prices would be frozen until 2011, but deliberately failed to mention that this applied only to direct debit payers, an option not even offered to Tribaldoviele.

Tribaldoviele said this weekend she would now cancel the contract The saleswoman was very confident and talking very quickly. I am not the sort to close the door on someone. That was my mistake. Morne Van Rensburg, 30, from south London, was a victim of Aneel Khans deceitful sales patter I got the drift he was from British Gas, because that is who I am with now . . . When I signed the forms I could see it said Npower and I said to him, who do you work for? But he blanked the question. The reporter recorded Khan telling Rensburg he was not switching his supplier as all the companies are part of the electricity board. Rensburg said this weekend he had not realised that Khan had indeed switched him to Npower I said to him, I dont want to change supplier. He said, you dont have to. Sharon St Claire from Cardiff changed to Npower last year after a visit from a charming salesman. But despite his assurances of saving her money, her 36-a-month bill rose to 99 two months ago. How it can more than double is beyond me. I feel betrayed by Npower, she said. Rip-off inquiry

Andrew Duff, chief executive of RWE Npower, is having a good year. In February his company reported record profits of 571m, the equivalent of 83 per customer and a 41% rise.

His own earnings are also looking healthy. In 2006, the most recent figures available, Duff earned a salary of 780,435, boosted by an extra 20,000 for his pension pot and an undisclosed bonus.

While he has enjoyed a 15% pay rise, it is a very different story for his 6.8m customers. In January he raised average electricity prices by 12.7% and gas prices by 17.2%.

Within a month, four of the big six energy companies followed with almost identical rises. Many customers viewed the timing with suspicion - and with some justification.

The Sunday Times found that the big six had raised prices and reaped record profits by stifling competition. Industry insiders allege that smaller rivals were denied fair access to their power.

The allegations forced Ofgem, the regulator, to launch an investigation into the market. The companies will face further scrutiny in parliament from the business, enterprise and regulatory reform committee which will examine whether consumers are being ripped off.