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Consumers must come first in bid for green energy

by Rebecca King, CAS policy officer (Energy).

This article first appeared in the Herald on 2 December 2020.

On 14 October, the Prime Minister stood in the House of Commons and responded to a question about the mis-selling of loans to people who made energy efficiency improvements to their homes.

He said, “We must accelerate the process by which these appeals are upheld and compensation is delivered, if only because that’s the way to build public confidence in all the retro-fitting, insulation and improvements that we need to deliver across the country as part of our green industrial revolution.”

I couldn’t have put it better myself, Prime Minister. But the proof of the pudding will be in the eating.

His response was to a question on behalf of people across the UK who are still seeking redress for the way they were ripped off years ago by a rogue trader called HELMS.

This company had gone door-to-door mis-selling the government-backed Green Deal, which was supposed to help home-owners make energy-saving changes at little or no cost.

In fact, HELMS left them with thousands of pounds of debt as well as botched building work and a distinct lack of trust in any such schemes in future.

CAS exposed HELMS in a report called Bad Company in 2016. We continue to support many of those affected and I have talked to some of them personally about the severe distress, as well as the financial loss, they have suffered.

The HELMS scandal is a classic example of how a good idea about tackling climate change can become a nightmare for consumers if they are not afforded basic protections. And it’s a lesson that should be heeded.

Don’t get me wrong. The national policy of transitioning to net zero is very welcome. The introduction of minimum energy efficiency standards means we all have to consider how to reduce the amount of energy we use. This will not only help cut emissions but will also improve public health and cut consumers’ fuel bills as well.

Government schemes like Green Deal can help persuade people to make these changes. But after HELMS, it’s clear that these need to be underpinned by stronger consumer protection measures and, crucially, by public trust in the energy efficiency market.

A recent survey for CAS found a significant lack of awareness of the rights and redress available to people who had recently purchased energy efficiency measures. Only 28% were aware of the cooling off period (when a policy can be cancelled for a full refund). 34% were aware of terms and conditions and the same proportion knew about the coverage available if the purchase was made on a credit card. But 22% weren’t aware of any of those rights.

These figures should be viewed alongside the growth of crime in this area. It’s not just HELMS. Recently, Trading Standards Scotland reported that 30% of their case work since 2015 has related to energy efficiency, amounting to consumer detriment in excess of £4.5 million. You may have seen some of the social media adverts that pop up screaming “free double glazing!” “Get your government-funded boiler here!” – I’ve been bombarded by them after searching for information on how to upgrade my single-glazed windows.

Consumer protection needs to be strengthened in this sector, and we recently set out our proposals for this in our Fit for the Future report.

Firstly, there needs to be a significant expansion of energy efficiency funding schemes. Although consumer protection remains reserved to Westminster, the Scottish Government could create a form of indirect protection by making sure traders in those schemes are signed up to ethical business practices.

We of course accept that the vast majority of traders are already trustworthy, but ethical business practices have industry-wide benefits such as facilitating transparency, with mistakes and problems openly acknowledged and quickly remedied. There also needs to be more collaboration within the industry to share best practice and identify rogue traders.

A government awareness campaign could also include information for consumers on how to make sure you are using a trusted installer and where to go for redress.

And we want to see greater investment in Trading Standards so that trader compliance can be enforced. This would demonstrate to both the public and rogue traders that enforcement is both available and effective.

The energy efficiency market is likely to grow exponentially in the near future and the potential for consumer detriment is high without a better safety net. Consumer protection mustn’t be an after-thought. It should be at the core of programme design, clearly weaved in from the very beginning so that people know where to turn when things go wrong.

To do better, we need to be better. The HELMS scandal must never happen again. Scotland’s march to net zero is achievable but it can only happen with the public fully on board, and that means their consumer rights must be robustly protected.