There are many bitter enemies among the electricity companies. At least that is what is indicated if you look at a new test that the Danish Consumer Council Think has conducted of a number of electricity companies.
In the test, 29 out of 85 electricity contracts fail, that is, every third product. This is the highest proportion of failures in a financial test by the Danish Consumer Council Think, and for many of the electricity companies, it is particularly violations of the law that are the basis for the failure rating.
Although the result may sound high, it does not surprise Christian Sand, senior advisor at the Danish Consumer Council Think, since according to him, the electricity market has long been "the pure wild west".
- Few markets are as heavily influenced by rogue companies as the electricity market. Every time we test electricity companies, we are confirmed that there are a lot of companies that, for example, illegally move customers from cheap agreements to very expensive agreements, that illegally withhold consumers' receivables, that hide large parts of the consumer price in lengthy fee lists or that engage in aggressive and illegal telephone sales, he says in a statement.
Seven electricity companies have had two or more cases with the authorities since 2021, the test shows. This applies to b.energy, Dansk Strøm, Edison, Energi+ (formerly Grow Energy), Grøn El-Forsyning, Modstrøm and Velkommen.
For example, since 2021, b.Energy has been reported to the police for violating the Marketing Act, received three warnings from the Consumer Ombudsman and violated the Danish Utilities Authority's rules that receivables must be paid to consumers upon final settlement. During the same period, Velkommen has also been reported to the police, had its rules tightened by the Consumer Ombudsman and had three cases filed with the Danish Electricity Authority.
It is particularly the marketing methods of the electricity companies that have given rise to cases with the authorities.
Most recently, the industry association Green Power Denmark has warned that some electricity companies obtain consumers' CPR numbers and addresses in order to register them as customers without either consent or the consumer's knowledge.
Too easy to become a player
During the most recent test of the electricity market, there were 55 electricity companies in the market. According to Christian Sand, this is far more than is needed to ensure effective competition. According to Christian Sand, the reason for the many players is that not enough requirements are placed on new players before they can enter the market.
- We must remember that the electricity companies "only" trade in electricity, and they neither produce nor transport the electricity to consumers. At the same time, by far the largest part of the electricity price is the same for all electricity companies, including the price of raw electricity, taxes and tariffs. So, in reality, there is very little that the electricity companies can compete on. Yet the market is chock-full of relatively small players, and unfortunately we can see that many of them fail to live up to even the most basic rules, says Christian Sand.
He calls for political action and tougher sanctions against lawbreakers.
- Tougher and more effective sanctions are needed if an electricity company breaks the law. The four electricity companies that had illegally withheld consumers' money were not fined or given any other noticeable consequences, and consumers are now paying the price for that, says Christian Sand.
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