A Danish energy company faces sharp criticism after experts described its business model as having similarities to a pyramid scheme. Consumers are being warned about potential risks involving prepaid electricity fees.
Professor Questions Velkommen’s Practices
An accounting professor from Aalborg University has raised serious concerns about the electricity company Velkommen. After reviewing recent financial statements, he said he would not personally take the risk of signing a contract with the firm. His assessment came after reports revealed that thousands of former customers are still waiting to receive money owed by the company.
According to the analysis, Velkommen’s operations depend heavily on customer prepayments. These funds, meant to cover future consumption, are allegedly being used to sustain the company’s day-to-day activities rather than refunded when customers terminate their contracts. This structure, he suggested, gives the setup “the character of a pyramid scheme.”
Even though Velkommen’s earlier accounts showed strong growth in 2021 and 2022, its 2024 statement indicated stagnation and a lack of new customer growth. The financial data also showed substantial outstanding liabilities to customers. This points to a risky dependency on a continuous inflow of new clients—a dynamic that could collapse if growth slows.
Consumer Group Warns Against the Company
The Danish Consumer Council, Forbrugerrådet Tænk, has formally warned people about Velkommen’s approach. It criticized what it called an “illegal practice” of overcharging customers through advance billing and then delaying refunds when contracts end. Their deputy director said the group’s latest evaluation placed Velkommen among the least trustworthy third of all energy suppliers in Denmark.
The watchdog urged households to consider whether they truly trust a company that holds several months of prepayments, especially one with ongoing legal and regulatory scrutiny.
Similar warnings have been issued in connection with other controversial energy providers in Denmark, including cases like district heating customers who have taken their supplier to court over withheld refunds.
Unpaid Refunds and Customer Complaints
One former customer, Frederik Hagen-Meincke, said he is missing more than 8,500 kroner despite ending his contract months ago. Under Danish law, energy firms must repay any overpayments along with a final invoice. Yet, in his case, as in many others, that has not happened.
Velkommen has not publicly provided a timeline for when those refunds will be processed. However, it continues to maintain that customers have nothing to fear and that all balances will eventually be settled.
The national energy regulator has opened a monitoring case against Velkommen and its affiliate Nettopower following a long list of consumer complaints about delayed or missing final settlements.
Controversies and Legal Challenges
Velkommen has been featured in multiple investigative reports, including Denmark’s “Operation X,” which documented the company’s use of illegal telemarketing techniques. Although Velkommen itself was later acquitted in 2025 of participating directly in unlawful phone sales, two related marketing firms were fined.
More recently, the Maritime and Commercial High Court ruled against the company for charging customers exit fees on variable price contracts, a practice that violated market rules.
The energy company’s owner, Lars Hein, who also serves as director at Salescorp, admitted the company has struggled with manual administrative systems. He argued that delays in repaying customers are due to these inefficiencies, not deliberate misconduct. He strongly rejected suggestions that Velkommen runs a pyramid-like business.
Growing Regulatory Pressure in the Energy Market
The Danish energy market has seen a rapid increase in new suppliers offering variable electricity contracts. As the number of consumer complaints rises, authorities have faced mounting pressure to improve oversight. The Velkommen case highlights the challenges both consumers and regulators face when balancing competition with financial stability in the sector.
For anyone considering a new provider, the professor advises asking straightforward questions: “Do I believe this company sells power cheaper than others? Am I comfortable with them holding months of prepayments?” If the answer is no, experts suggest finding a different supplier.
Sources and References
The Danish Dream: Danish energy provider faces lawsuit from district heating customers
The Danish Dream: Energy electricity in Denmark for foreigners
TV2: Det har karakter af pyramidespil, siger professor om omstridt elselskab
