We recently spoke to two companies who told us that that their employees had been “bullied” by salespeople into agreeing to an electricity supply contract over the phone.

These phone calls typically include one or more misleading threats or promises:

  • “We work with PECO and you’re entitled to a discount on your energy bill.”
  • “If you don’t sign with us immediately, your power may be cut off.”

These claims are both rubbish:

  • They don’t claim that they are PECO, but they imply it. And utilities don’t offer consumer discounts.
  • Your power will never be cut off as long as you are paying your bill. If your current supply contract were to expire without renewal, you’d simply be billed directly by the utility at the default rate.

Even worse, the rate offered is typically ridiculously noncompetitive.

The fact is that these methods are not illegal, per se.  The prospect is typically transferred to a third-party verification desk, and they are asked to confirm that they have the authority to execute the contract, and then they agree to the terms on a recorded line.

The problems are a result of what is said before the recorded section of the conversation.

Reversing an expensive contract like this is challenging because a physical contract is not signed, and often the person agreeing to the contract on the line is often not a decision maker with authority to enter into a contractual agreement on behalf of their company.

We recommend that you inform your employees that this practice is common and that a contractual agreement should never be completed via a phone conversation.

Fortunately, in the case of the two companies above, we were able to get these decisions rescinded, and we arranged a more suitable contract at roughly 25% less than the salesperson offered. But here’s the real issue… Why would someone agree to a price for anything as important as energy without asking for competitive bids?

And what if you could use a process that ensures you will see EVERY bid from EVERY supplier?  A process in which all the suppliers compete head-to-head to win your business? The fact is: If you aren’t using The Energy Exchange for your energy procurement, you are making a major procurement decision without seeing all the prices available.

And if you’re making a procurement decision based on a “bullying” call, you are undoubtedly paying too much.

 

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