An audio recording has revealed the "underhand" tactics used by an energy broker to convince a nursing home resident with dementia to adopt an energy plan that eventually charged her thousands of dollars.

It shows how the cold caller, who was acting on behalf of 1st Energy, is able to sign up 86-year-old Joan Ford to a business plan despite her stating she didn't own a business and was a resident in an "aged facility".

All her energy costs are included in the fees charged by her Endeavour Hills nursing home.

As part of an investigation by the Energy and Water Ombudsman, the recording of the phone conversation was released to Mrs Ford's family, who have power of attorney.

'She was bamboozled into this nonsense'

Her son-in-law Mark Matthys said they provided the audio to be broadcast by ABC Melbourne to demonstrate how easy it was for vulnerable people to be talked into signing up to expensive energy plans.

"I am incensed that despite clearly identifying on the recorded tape that she is in an old age home and that her age was 86, that she was bamboozled into this nonsense," Mr Matthys said.

"The more publicity and exposure these underhand and coercive practices employed by the energy companies get, the better."

In a written response to the Ombudsman's investigation, 1st Energy said it believed it obtained informed consent during the sales call.

The company also said the phone number was not on the do-not-call register.

In response to questions about how it was able to sign Mrs Ford to an energy plan, despite her unit at the aged care facility having no individual electricity meter, 1st Energy said the account was created based on the unit's address, but "the meter associated with this address belongs to a nearby business".

"This is the reason the account was created and electricity usage was billed, even though Mrs Ford does not normally receive electricity bills," the company said.

Huge discounts used to lure customers

The recording shows the salesman, who identifies himself as Austin, calling Mrs Ford by her first name.

Austin: "I believe that you are the one who is looking after the electricity bills for the property?" Joan: "Yes." Austin: "That's good. So basically Joan, we have called you up just to boost your electricity discount to up to 43 per cent."

He proceeds to explain the discount was guaranteed for two years and came with no lock-in contracts or exit fees.

It's then that the biggest red flag emerges.

Austin: "I'm just locating your address. So I can see that the property which you're running ... is a business one actually. It's not showing a residential house. Are you running any kind of business out here?" Joan: "No business. It's actually an aged facility where I stay." Austin: "So you don't have any kind of ABN [Australian Business Number] for yourself?" Joan: "No." Austin: "So basically Joan, what I can notice is that the meter which you have right now in this property, the meter is a business meter actually. Maybe you're not running a business, right, that's fine. So the discount which we're going to give you, it will be not a residential discount ... as the meter is a business meter so I have to provide you the business discount actually. So the discount will be actually 38 per cent pay on time discount off your energy usage charges which you will be getting for the next two years."

The energy broker then explains the transfer will happen automatically and will be subject to a cooling-off period.

Austin: "So the only change or the difference you will be noticing — it will be not in your set up or not in your habits or not to get out of your comfort zone — it's just that instead of you getting the bills from any other company, you will be having them from 1st Energy, OK?" Joan: "Yes."

The recording also shows the charm the caller used which made Mrs Ford feel at ease.

After she had agreed to sign up to 1st Energy, Mrs Ford was asked for her date of birth, which is in 1932.

Austin: "One thing I must say, ma'am, you don't sound like 1932 born. I must say your voice is quite lovely. You can take it as a compliment. I thought I'm speaking to someone with only around in their 60s or 65, max. Not more than that." Joan: "(Laughing) Thank you." Austin: "You're most welcome."

Mr Matthys said there were three obvious red flags in the recorded phone call; when Mrs Ford said she was in an aged care facility, that she had no ABN, and that she was 86 years old.

"How can anybody of sane mind get informed consent from an 86-year-old with early stages of dementia onset?" he said.

"The audio demonstrates that alarm bells should have been going off."

Mrs Ford was signed up to an energy account using the meter of a nearby business. ( ABC News: Andrew O'Connor )

Account not cancelled due to 'human error'

Mrs Ford later received a $1,384 bill for electricity supposedly supplied in May.

Her family contacted 1st Energy after receiving the bill and were told the problem would be fixed, but then a second bill arrived totalling $2,584 for electricity supplied in June and part of July.

It was only once 1st Energy was contacted by ABC Radio Melbourne the account was cancelled and all outstanding amounts were wiped.

"I've extended our apologies for the administrative error and the inconvenience and concern this has caused the family," a 1st Energy spokeswoman said at the time.

"Due to human error the matter was unfortunately not fully remedied when initially picked up. It has now been fully resolved."

Victorian Energy and Water Ombudsman Cynthia Gebert told ABC Radio Melbourne's Jon Faine the call was an example of people using "high-pressure sales to push through and achieve targets".

"We're seeing conduct that falls well below community standards," she said.

"There are signals throughout conversations where people can pick up and go 'oh this isn't right, this customer isn't exhibiting explicit informed consent' which is what we need for people to engage in a contract."

She said more work was needed to improve standards, particularly with smaller retailers who are aggressively pursuing new customers.