Ofgas warns consumers to ‘beware of prize draws’

Gas watchdog Ofgas has warned consumers to beware of the gas supply companies – licensed by the regulator – which offer prize draws to persuade them to switch supply away from British Gas.

According to the watchdog, domestic customers who enter prize draws run by gas supply companies risk signing away basic rights.

If consumers sign up to a new “doorstep” gas supplier they have a seven-day “cooling-off” period, when they can cancel the contract if they change their mind. But, in a bizarre legal twist, if the gas company can show that the doorstep visit was solicited by the customer, the cooling-off period does not apply. If the consumer has entered a prize draw, the company can include a clause in the small print requesting a home visit, and deny the customer rights to the cooling-off period.

This is one of the many shady practices Ofgas believes gas suppliers could use on unsuspecting customers through doorstep selling techniques. Last year, SWEB Gas stopped doorstep selling after criticisms of its methods by the watchdog.

The Ofgas warning on prize draws comes as competition is introduced to the gas market nationally following regional tests. But the regulator refuses to introduce an enforceable code on the way the gas companies market their products. A code has been drawn up by the Gas Consumers Council, but has been rejected by Ofgas director general Clare Spottiswoode.

News Analysis, page 23

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