A sorry tale
HELMS: Consumers must not become easy targets again
By Emma Ash, Energy policy officer at Citizens Advice Scotland.
This article was first published in the Herald on 24 June 2020.
As lockdown measures begin to lift and we look to the future, you might have heard calls for a ‘green recovery.’ At Citizens Advice Scotland, we firmly support government efforts to persuade people to make their homes more energy efficient to tackle fuel poverty and meet net zero targets.
But such schemes need to be rigorously controlled to ensure consumers are not ripped off.
Over the last two years I’ve been supporting people who were mis-sold products like external wall cladding and solar panels by rogue trader Home Energy & Lifestyle Management Systems (HELMS). They operated under the UK Government’s Green Deal, which enabled people to install home energy measures through interest-free loans.
The activities of businesses like HELMS were supposed to be backed up by regulations that made them act fairly. But HELMS abused the trust implied under their registration as a Green Deal provider, mis-selling loans to over 4,000 households across the UK.
HELMS sold door-to-door, often targeting older and vulnerable people. They bamboozled consumers with paperwork and complex calculations, claiming the technology was free thanks to the Green Deal.
After the work was done, it came as a shock to people that their solar panels were not free. They’d been signed up to a loan costing on average £4,091, although some plans amounted to as much as £17,000, before interest. Re-payment periods last as long as the typical mortgage.
The loan is paid back through your energy supply and is tied to your house, which can make properties harder to sell. Some people also had their homes damaged and many discovered the required building warrants were missing. They now face retrospective costs and in-valid house insurance policies.
To add insult to injury, HELMS misled many customers into signing over twenty-year-long feed-in tariff payments. These were supposed to incentivise home-owners to install renewable technology as they could make money ‘selling’ electricity back to the national grid.
But the injustice for HELMS customers is no longer just that they were scammed. On top of their distress and financial hardship, they are now battling for their consumer rights.
The Scottish Citizens Advice network has been supporting HELMS customers for several years as they take on the financial company receiving the loan re-payments they didn’t know they’d signed up for, along with the UK Government.
The government is well aware of HELMS’s activities and the company was fined by the Secretary of State for Business, Energy & Industrial Strategy for its selling practices.
Consumers’ usual complaint route when loans are mis-sold is through the Financial Ombudsman. But when the extent of HELMS’s practices emerged, the directors of HELMS dissolved the company. It no longer exists.
The sole option left is complaining to the government. But to do this consumers must gather evidence (and lots of it) and decipher legal jargon in letters citing regulations and energy saving calculations that are difficult for even energy advisers to follow.
For those who have complained and waited years for a decision, offers are finally starting to come through. But for many, these are as low as 30% off the loan, even when it is recognised mis-selling occurred. We believe these loans should be cancelled altogether.
It appears a Green Deal loan is treated differently from others and offers less consumer protection. If an ordinary bank loan had been mis-sold it would be cancelled, any money paid refunded plus interest and compensation, and credit histories wiped clean.
The finance company collecting the re-payments claims consumers signed a contract, knew what they were doing and gained an asset to their home.
This goes against consumer protection law and the regulations governing the Green Deal.
Fundamentally, consumers should have been protected from rogue traders under a government scheme. Instead they’re left with loans they didn’t understand and products that don’t offer the savings promised. For many it actually costs them to have panels or cladding.
This is upsetting on two levels. First, these householders have been through enormous distress when they were only trying to save some money and help the environment. But secondly, the HELMS saga risks giving a bad name to the whole concept of green energy and government schemes promoting it.
The government needs to act here not just to give consumers their due but to demonstrate schemes like the Green Deal are safe. One of the ways we think there can be adequate oversight is through a parliamentary inquiry. That’s why we’re calling on the Business, Energy and Industrial Strategy Committee to investigate.
The HELMS saga is a sorry tale. But its lessons are stark and must be learned. Scammers and rogue traders will always look for an easy way to make money. So as HELMS customers continue their fight for justice and we look towards a green recovery, governments must ensure consumers are robustly protected and do not become an easy target again.