Virgin Energy culls its sales force

The home energy branch of the Virgin group has sacked dozens of rogue sales staff after admitting that thousands of residents may have been conned into buying services with fraudulent hard-sell tactics.

The company has agreed to a compensation deal for customers, who were misled into signing power agreements by sales reps attempting to boost their commission.

In the Enfield area alone, 14 sales staff at Virgin Home Energy have been sacked after an inquiry suggested that up to 4,000 homeowners may have been duped.

On Tuesday, the company's customer care director Simon Carter attended a meeting with residents at a school where he offered a £50 payment to anybody who had been affected.

The company, owned by London Electricity, admitted that sales staff had breached Trading Standards rules.

A week ago Sir Richard Branson, who has a 25 per cent interest in Virgin Home Energy, gave the company a month to clean up its act or lose the right to use the Virgin name. Virgin executives fear the move into the energy market is severely tarnishing the group's brand reputation.

Incentives used to secure signatures of customers included offers of free Virgin services such as record vouchers, mobile phones or travel. In addition, some sales staff scoured electoral lists and telephone directories to forge signatures of people, including some who had recently died.

While Enfield was the worst-affected area in the South-East, the company is now checking possible cheats in its nationwide sales force. It has also agreed to work with local Trading Standards officersto ensure no regulations are broken in future.

Derek Salter, spokesman for London Electricity, said of the Enfield meeting: "The point was to hold up our hands. We have fouled up here and we are determined to put it right.

"Unfortunately, this is something that has been affecting both us and the wider industry. In future, any contracts we get will not be processed until we have got in touch with the customer and got a definite confirmation of the agreement. Any sales agents who are fraudulently signing up people can expect to be dismissed.

"Our reputation is very much on the line, as is the reputation of our competition and the industry as a whole."

Despite the offers of compensation and apology, many customers are still angry.

Irene Wilson, who chairs the Willows Residents Association, which represents 2,000 people in Enfield, said: "People went away from the meeting happier than before, but not everything has been solved. There are a few people who have suffered real trauma over this and I expect they will get a little more than £50 in the end."