AGCM

Consumer protection is pursued against unsolicited energy and gas supply contracts.

In December 2016, the Italian Competition Authority (ICA) closed 3 new proceedings initiated in July 2016 against Iren Mercato (PS6259), Estra Energie and Estra Elettricità (PS10114) and ENEGAN (PS10138) concerning the offer and conclusion of distance contracts for electricity and natural gas supply in the free market, through door-to-door (D2D) agents and teleselling. Overall, more than 1.6 million euros of sanctions were imposed.
During the preliminary investigations, in the framework of the Memorandum of Understanding for cooperation signed with the ICA, the Italian Regulatory Authority for Electricity Gas and Water (AEEGSI) issued a very detailed opinion on the matter, and the Special Antitrust Unit of Guardia di Finanza cooperated in inspections that were carried out at the aforementioned companies’ premises.

The Authority has established that the four companies adopted contractualisation procedures based on the exploitation of the consumer’s bounded rationality and information asymmetry, also due to the intrinsic complexity of commercial offers of electricity and natural gas in the free market. This has led to the unsolicited conclusion of contracts and the consequent unsolicited activation of electricity and/or gas supplies.
Specifically, the ascertained conducts included the following:
(i) the conclusion of supply contracts with absolutely no consent from the consumers – even with resort to false signatures – and, unjustified requests for payment on activation of unsolicited supplies;
(ii) the conclusion of supply contracts on the basis of misleading information about the identity of the agents and the nature and purpose of the contact and without adequate knowledge and information about the contract terms and conditions, i.e. in such conditions as to considerably limit the ability of consumers to make a conscious decision about the offer, also due to the times and places in which the contacts occurred;
(iii) the several hindrances created to the cooling-off right - the limitation of the manner in which it was to be exercised, the failure to make the withdrawal form available (with the exception of IREN Mercato), incorrect indication of the deadline for its exercise, up to non management the handling of complaints concerning unsolicited supplies in the case of Estra;
(iv) non compliance with the teleselling procedures set forth in the Consumer Rights Directive (transposed into Legislative Decree 21/2014), which requires the consumers to be given the possibility to explicitly choose the means of confirming their will to enter the contract other than the written form, to be systematically provided with a durable medium containing the recording of the call in which they confirmed and entered the contract before the contractual relationship is established and the confirmation of contractual terms and conditions by the agent.

The investigations have led to the application of sanctions proportionate to the size of each company and the seriousness of their infringements to the Consumer Code. In detail:

During the proceedings, it was found that both IREN Energia and the Estra group companies had initiated internal processes to check the contractual procedures in place and, before the conclusion of the proceedings, they proposed and implemented significant changes to the said procedures, in order to overcome the contested consumer issues, including check calls for D2D contracts, providing the consumer with the contractual documentation and the recording of confirmation and conclusion of the contract before the contractual relationship is established, performing a second call to check for reception of the contract documents and the consumer's consent, proposing to explicitly choose to confirm consent in writing or by phone in case of teleselling, strengthening of agent conduct controls.
Finally, both IREN Energia and the Estra group companies will no longer request payment of unsolicited supplies.
ENEGAN, on the other hand, introduced a more appropriate sanction system for incorrect conduct of agents and interrupted teleselling acquisition activities.
The Authority has taken into account the collaborative attitude of the companies involved and therefore reduced sanctions proportionally to the relevance and degree of effective implementation of the proposed measures.

These investigations followed those carried out in 2015 against ENEL Energia, ENI, ACEA Energia, HeraComm, GdF Suez (now Engie), Beetwin (now Geko), Green Network, which led the companies involved to review their electricity and gas contract acquisition procedures in 2016, with the exception of Green Network, against which a proceedings is underway for non-compliance.

Rome, 18 January 2017