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Green deal finance company falls foul of advertising watchdog Green deal finance company falls foul of advertising watchdog
(about 2 hours later)
A government-backed company set up with £244m of public money to finance the green deal energy efficiency programme has fallen foul of the advertising watchdog after claiming that its loans are the cheapest on the market.A government-backed company set up with £244m of public money to finance the green deal energy efficiency programme has fallen foul of the advertising watchdog after claiming that its loans are the cheapest on the market.
In an embarrassment to ministers, an investigation team from the Advertising Standards Authority has upheld a complaint against the Green Deal Finance Company [GDFC]. The GDFC is part-funded by the publicly-owned Green Investment Bank and officials from the Department of Energy and Climate Change [DECC] have attended its meetings. In an embarrassment to ministers, an investigation team from the Advertising Standards Authority has upheld a complaint against the Green Deal Finance Company (GDFC),which is part-funded by the publicly owned Green Investment Bank. Officials from the Department of Energy and Climate Change (DECC) have attended the GDFC's meetings.
But it has breached advertising rules claims made in a brochure that include the suggestion that green deal payment plans – to pay for loans to insulate homes, install new boilers and other energy efficiency schemes – are typically the cheapest available. But the GDFC has breached advertising rules with claims in a brochure that green deal payment plans – for loans to insulate homes, install new boilers and other energy efficiency schemes – are typically the cheapest available.
"The ad must not appear in the same form," said the ASA investigations team. "We told GDFC to ensure they held sufficient evidence to substantiate their claims, that they did not omit material information from their ads, and to make sure their claims were appropriately qualified in future.""The ad must not appear in the same form," said the ASA investigations team. "We told GDFC to ensure they held sufficient evidence to substantiate their claims, that they did not omit material information from their ads, and to make sure their claims were appropriately qualified in future."
The ruling must still be made official by the ASA's own ruling council but Caroline Flint MP, Labour's shadow energy and climate change secretary, seized on the gaffe to pronounce the green deal initiative a total flop. The ruling has to be confirmed by the ASA's ruling council and the GDFC said it was confident it would be overturned.
But Caroline Flint, Labour's shadow energy and climate change secretary, seized on the gaffe to pronounce the green deal initiative a total flop.
"It's bad enough when the energy companies are guilty of mis-selling, but it comes to something when the government itself is responsible for a mis-selling scandal. There are laws in place to protect consumers from mis-selling, so if any households have taken out these loans on the basis of wrong information they may well have a case to recover their costs," she said."It's bad enough when the energy companies are guilty of mis-selling, but it comes to something when the government itself is responsible for a mis-selling scandal. There are laws in place to protect consumers from mis-selling, so if any households have taken out these loans on the basis of wrong information they may well have a case to recover their costs," she said.
"No amount of dodgy marketing can hide the fact that the green deal has been a complete flop. With sky-high interest rates, hidden charges and penalty payments it's no surprise that so few people have taken out a green deal plan. But instead of making bogus marketing claims, the government should face up the scheme's failings and ensure the green deal is a genuinely good deal for consumers," she added."No amount of dodgy marketing can hide the fact that the green deal has been a complete flop. With sky-high interest rates, hidden charges and penalty payments it's no surprise that so few people have taken out a green deal plan. But instead of making bogus marketing claims, the government should face up the scheme's failings and ensure the green deal is a genuinely good deal for consumers," she added.
The GDFC, a not-for-profit business, said it was still confident that the ASA ruling would be overturned.The GDFC, a not-for-profit business, said it was still confident that the ASA ruling would be overturned.
"It's far from over and there is no official decision from the ASA," said a company spokesman. "We are still submitting our arguments and it should be stressed that this involved a leaflet that went to 100 people or so. It was not sent out to the general public or any consumers as we offer financing not services.""It's far from over and there is no official decision from the ASA," said a company spokesman. "We are still submitting our arguments and it should be stressed that this involved a leaflet that went to 100 people or so. It was not sent out to the general public or any consumers as we offer financing not services."
But the document marked "confidential" seen by the Guardian shows the ASA disagrees with this argument and says the material included on the GDFC website seemed clearly aimed at consumers who could easily access a brochure that made claims that could not be substantiated.But the document marked "confidential" seen by the Guardian shows the ASA disagrees with this argument and says the material included on the GDFC website seemed clearly aimed at consumers who could easily access a brochure that made claims that could not be substantiated.
DECC was unavailable for comment last night but Ed Davey, the energy and climate change secretary, has in recent days promised to shake up the scheme after his department's own figures showed it had spent millions but insulated relatively few homes.DECC was unavailable for comment last night but Ed Davey, the energy and climate change secretary, has in recent days promised to shake up the scheme after his department's own figures showed it had spent millions but insulated relatively few homes.
Davey said that while take-up of green deal financing had been poor with just a few hundred homes using it, a million homes in England and Wales will have been insulated by April 2015 under the broader green deal scheme and its sister Energy Companies Obligation (ECO) since they began in January 2013.Davey said that while take-up of green deal financing had been poor with just a few hundred homes using it, a million homes in England and Wales will have been insulated by April 2015 under the broader green deal scheme and its sister Energy Companies Obligation (ECO) since they began in January 2013.
A spokesperson for DECC said the department was unable to comment, adding that GDFC is a private company.A spokesperson for DECC said the department was unable to comment, adding that GDFC is a private company.