Office of Fair Trading
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OFT approves consumer code of practice for the renewable energy sector
Renewable Energy Assurance Limited (REAL) has become the first trade body within the energy sector to secure OFT approval for its code of practice under the OFT's Consumer Codes Approval Scheme (CCAS).
REAL's Consumer Code covers the sale, contracting, installation and servicing of small-scale energy generating systems including solar electricity, solar water heating, small-scale wind electricity and ground and air source heat pumps.
The OFT only approves codes that have proved effective in safeguarding and promoting consumers' interests, going further than the basic requirements of the law. Key features and benefits of REAL's Consumer Code are:
members cannot employ high pressure selling/inducement to force quick buying decisions
all purchases have a seven working day cooling off period, even when the law does not provide cancellation rights
customer prepayments or deposits are fully protected in the event that a member is unable to fulfill the order
members are clear and realistic when providing estimates of the likely savings customers might make from the product
a low cost independent redress scheme is available if complaints need to be resolved.
The OFT raised concerns surrounding the potential for mis-selling of solar panels last month when it published the findings from its off-grid market study. The approval of the REAL Consumer Code reflects the OFT's commitment to encouraging high standards among firms in the energy sector. The OFT will continue to work with REAL as it monitors complaints against its members and enforces its code. Within the wider energy sector, the OFT is committed to taking steps to address unfair commercial practices where it uncovers them.
Cavendish Elithorn, Senior Director of the OFT's Goods and Consumer Group, said:
'The renewable energy sector is a relatively new market and is growing rapidly as people look for more cost effective and environmentally friendly energy sources.
'It is important that people making such an important purchase can do so confidently and the approval of the REAL Code is part of the OFT's commitment to help people investing in renewable energy technologies. People who buy goods or services from a business with an OFT approved code can expect a higher standard of protection than that required by law.'
Virginia Graham, Chief Executive of the REAL, said:
'We work hard to ensure all our members comply with our Code. Gaining OFT Code approval will help us enormously to drive the highest professional standards in our sector. We act on the complaints and tip-offs we receive to inform the monitoring and enforcement we do. This year we have audited, compliance checked and mystery shopped 1,000 companies. If companies do not meet our standards, we will investigate promptly and will impose sanctions.'
A copy of the REAL Assurance Scheme Consumer Code is available from the REAL website.
The REAL Assurance Scheme Consumer Code covers small-scale heat and power systems that enable people to generate energy at home from renewable sources. Technologies for doing this include photovoltaic solar panels, small-scale wind and hydro electricity generating units, ground or air source heat pumps, solar water heating panels, boilers or CHP units fuelled by wood chips or pellets.
The Renewable Energy Association (REA) is the trade association for the renewables industry. Its wholly-owned subsidiary set up the REAL Assurance Scheme in 2006.
The OFT's Consumer Codes Approval Scheme (CCAS) aims to promote and safeguard consumer interests by helping consumers to identify better businesses, and to encourage those businesses to raise their standards of customer service. The core criteria cover the organisation of the code sponsor, the preparation and content of the code, complaints handling, monitoring, compliance and publicity.
The OFT's Consumer Codes Approval Scheme consists of two stages. During Stage One the code must meet the OFT's published core criteria, which contain measures designed to remove or ease consumer concerns about undesirable trading practices. At Stage Two the code sponsor must prove that its code lives up to the promises made in Stage One by demonstrating that the code is being effectively implemented by its members and that consumer disputes are properly resolved. The REA achieved Stage One approval in November 2007.
The Enterprise Act 2002 (Part 1, Section 8) gives the OFT powers to approve and promote consumer codes of practice that meet the OFT's core criteria. The OFT's Consumer Codes Approval Scheme aims to promote and safeguard consumers' interests by helping consumers identify better businesses and to encourage businesses to raise their standards of customer service.
For more information see the Consumer Codes Approval Scheme section.