Sales Pitches: Myth or Fact?

If approached by an energy salesperson make sure the person's sales identification is prominently displayed. It’s also a good idea to make sure the company name on both the identification badge and the contract match.

Based on actual consumer feedback, we compiled the following list of the most “common” things consumers tell us they hear when approached by one of these companies.

MYTH: “I'm with/from the Government”

FACT: The Alberta government does not sell energy contracts — either door-to-door or over the telephone. If you think a company has tried to mislead you or has misrepresented where they are from, please call the Office of the Utilities Consumer Advocate at 310-4822 or e-mail us.

MYTH: "I'm with/from your current utility provider”

FACT: Your current retailer does not go door-to-door selling energy contracts. They already have your business. Anyone offering you a special "rate" or "deal" is a salesperson selling energy contracts for a competitive energy retailer.

MYTH: “You’re a good customer, therefore, we are offering you a "special rate"

FACT: Regulated companies do not send agents door-to-door and cannot offer customers a special rate — all regulated customers pay the same rate.  If someone comes to your door offering a special rate, they are with a competive company and are offering you a contract.  Be aware that some competitive companies have names that are similar to your regulated retailer; however, the products they are selling door-to-door are vastly different and will result in significant changes to your billing.

MYTH: “I'm here to discuss why you haven't been reading the back of your bill”

FACT: Interesting statement, but what does it mean? The sales person is trying to find out if you understand Alberta residents can choose a regulated or competitive energy retailer. Some regulated energy bills may contain a paragraph that explains about the option to receive regulated or competitive energy service. Competitive companies have no way of knowing if you have or have not read this information on your utility bill. Sales people may use this statement to try to convince you they are from your current provider, or that you are obligated to choose a competitive retailer. Be sure to ask and understand what company the sales person works for. Rest assured, you are under no obligation to switch retailers, regardless if you receive your energy on a regulated or contract rate.

MYTH: “The regulated rate is ending and you must choose a competitive retailer or you will be disconnected”

FACT: No one is forced to sign an energy contract. If you are on the regulated rate for natural gas and/or electricity, you will not be disconnected if you do not sign a contract.

MYTH: “We are taking over the billing from your existing retailer”

FACT: No competitive retailer has been asked to "take over" from any regulated company. This is an incorrect and misleading statement. Please report any cases of this type of misrepresentation to the Office of the Utilities Consumer Advocate by phone at 310-4822 or by e-mail.

MYTH: “I’m here to save you money”

FACT: Most energy contracts provide you with a fixed-price rate over a term. This rate may be higher or lower than future market prices.

MYTH: “Your contract will not be set up until you’re contacted by our verification department”

FACT: While competitive retailers may use a verification process that includes a phone call, this verification IS NOT required to process and validate your contract. A contract is considered legal and binding as soon as you have agreed to it. In most cases, you have a maximum of 10 calendar days to cancel without penalty. If you enter a contract during a telephone conversation, you can cancel the contract without penalty up to 60 calendar days after you receive your first bill.

MYTH: “Just sign this form to give me permission to send you more information about my company’s contracts" or, "just sign here so I can prove I offered you this contract/deal, but you declined"

FACT: You are NOT required to sign any documents to "prove you declined a contract" or to "receive more information". DO NOT sign anything unless you are willing to enter into an energy contract. If the sales representative is not able to answer your questions or if you want more information, call or write the energy retailer directly. Or, call the Office of the Utilities Consumer Advocate at 310-4822 or e-mail us.

MYTH:  “You can cancel the contract at any time without penalty”

FACT:  It is extremely important to read the terms and conditions set out in your contract regarding whether or not you will be charged an early exit fee upon cancellation. In some cases, THESE FEES CAN BE SIGNIFICANT. They can be in the range of $1,500 — depending upon how much time is remaining on the contract. This cancellation fee may be described as an “early exit” or an "administration" fee in your contract. Although it is a good business practice, there is no requirement to tell you about this fee during the sales presentation.

In other cases, contracts can be cancelled with 30 days notice without any fees whatsoever. Some companies allow you to switch to another plan they offer without fees.

In all cases, the company expects you to read and abide by the terms and conditions of the contract you have signed.

MYTH:  “You can switch to a lower price plan if the rates go down”

FACT:   The price of many energy contracts is fixed for the term of the contract. DO NOT RELY ON ANY VERBAL PROMISES. READ THE CONTRACT, especially the contract terms and conditions. If you have the ability to cancel without penalty or switch plans, the contract’s terms and conditions will state this option. If something you are being verbally told is NOT in the contract’s terms and conditions, the company will likely not honour it.

MYTH:  “I need to see your bills to make sure your account is billing correctly”

FACT:  Your energy bills are your personal information. You are under NO obligation to show ANYONE your utility bills. Some sales people want to see your bill to determine if you already have an energy contract. They do not want to waste time giving you a sales pitch if you are under contract to someone else.

MYTH:  “I’m in your neighbourhood tonight and won’t be back”

FACT:   While it is true door-to-door sales people may not return to your area for some time, you can call the company directly any time and they will provide you with information on their current contracts and prices. Do not feel pressured to “sign at the door” for fear of “missing out” on a good deal.

MYTH:  “All your neighbours have signed up — don’t you want to save too?”

FACT:  While it may be true some (or even all) of your neighbours have signed a contract, you must decide what is right for YOU. There are many reasons signing a contract can be a good idea. However, you should research the contract and its terms and conditions thoroughly to decide if signing is in your best interest.

MYTH:  “We can save you administration fees by giving you one bill”

FACT:  It is true most competitive retailers offer a discount on the administration fees if you sign up for a “dual fuel” (electricity and natural gas) contract. However, there is no industry standard on how much an administration fee is or can be. Contact your current retailer or look on your bill to find out what you are paying for administration fees. For example, if you currently pay $6.00 for gas and $7.00 for electricity, your total administration fees are $13.00. If a competitive retailer charges $10.00 per service (total of $20.00) and promises you will save 50 per cent of these fees, be aware you would be saving 50 per cent off THEIR fees, and not necessarily the fees you are paying now.

MYTH:  “Nothing is going to change from your existing supplier”

FACT: If you are currently billing with a regulated provider (e.g. Direct Energy Regulated Services or Enmax Power Corporation) and then sign a contract with their affiliated competitive retailer (e.g. Direct Energy or Enmax Energy Corporation), there will be many changes to your billing. Some significant changes you will notice are:

• You will receive a new account number and will have to update your banking information if you pay by telephone or Internet
• Your existing budget plan will NOT be transferred. You will receive a final bill from your current company requesting full payment of any outstanding balance
• You will be billed for energy based on the agreed-to-contract price, which could be fixed, floating or a mixture of both.

Tipsheets

For more information about electricity and natural gas contracts and door-to-door sales, read Service Alberta's

• Electricity and Natural Gas Contracts
  
  

• Dealing with Door-to-Door Sales