Tony Levene gets a visit from a scammer. But how does he know it's a scammer?
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Most deals that look too good to be true are too good to be true. Every scam watcher knows that.
So run a million miles from them. But a few almost unbelievable deals are for real.
A few years ago, I saw an advert in my local council magazine offering solar hot water panels and a wind turbine at £500 each.
It sounded fantasy but it was the council offering the green goodies so I applied – along with thousands of others in my area.
The wind turbine offer was fantasy. It was almost immediately withdrawn as the technology does not fit back gardens. But I was one of the fifty chosen for the solar roof panels.
Eighteen months later – council wheels grind slowly – the work was completed. I paid my £500.
The installers said the work was worth £5,000. So where did the balance come from? My benefactor was power company Scottish & Southern which subsidised the scheme as part of a green offset plan – more use than sending out millions of unwanted light bulbs.
How much do I save from this new source of hot water? I really don't know as there are variables including the number of people at home, gas costs, and, of course, the weather.
But I do know that, leaving aside the good green feeling, I have a good chance of recouping my £500 in a few years. However, had I paid the economic price, then I would be talking about 30 to 40 years (assuming power prices stay unchanged).
Despite having these panels, I get loads of salesfolk knocking at the door trying to sell me solar panels. I invited one (who had not even bothered to look upwards to the roof) in.
He assured me I would never have to pay for water heating again (not true as the panels offer little in winter) before quoting me £12,000 – or £10,000 if I signed up there and then. This “drop close” is an old trick beloved of double glazing and home improvement sales staff.
Don’t fall for this trick
Even at £10,000, the payback period is some six decades. And that's not counting maintenance or eventual replacement of the panels, controller or special water tank.
These companies often target retired people but even their grandchildren may not benefit.
Trading standards departments have shut down some companies. And others have gone bust. Still, the same people re-emerge like versions of a latter day phoenix, ready the recycle the same sales tricks on more unsuspecting victims who want to make the planet a little greener.
Legitimate offers
So what to make of a new variety of deals from firms such as Homesun and A Shade Greener? These offer installations of photo voltaic panels (these generate electricity rather than heat water like mine) to suitable homes, generally those with large south-facing roofs.
The important difference here is these installations are free. In return for lending your roof for 25 years to these companies – and there will be others coming into the market – you get the electricity they generate at no charge. Using a smart meter shows what you generate and what you need to buy from your electricity supplier.
So what's in it for the installers who spend about £10,000 per house? They expect to profit over the 25 years from the government's new “feed-in tariff” scheme which pays a generous price per kilowatt to small scale green electricity generators. The installer keeps the money – estimated at 5 to 8% of its investment each year. You get the power.
And even if the installer goes bust, your contract will probably be sold to another firm. Failing that, you get to keep everything.
If there is a major downside to this, I must confess I have not found it!
What do you think?
Award-winning scams expert Tony Levene explains why he's writing a blog about scams and why he is The Scam Magnet!
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