October 20, 2014
On the face of it, it seems wrong not to tell customers about cheaper deals in the market but is it, or does it help prevent confusion for the same customer?
It is not our job to defend how other TPIs operate but there are compelling reasons why a customer might want to use and trust a comparison site rather than one single supplier or a collective switch for that matter (see Energylinx news archive for more on that topic)
The benefit for a consumer when using a comparison website is that they are getting a bespoke Personal Projection that is tailored to suit their needs, not a generic headline grabbing figure from a tariff that they cannot actually sign up to even from the supplier direct.
There can be technical, economic and personal preference reasons that certain tariffs or suppliers are not suitable for certain customers before you even start to look at commissions as the issue.
• Technical reasons such as because they live in an IGT (Independent Gas Transmission) area a supplier will not accept them .
• Economic reasons that they have a prepayment meter and it would cost £150 to change to a credit meter for example
• Or even personal preferences that they do not want to manage their account online or a bad experience with a supplier.
When these factors are taken into account with Ofgem's Simpler Clearer and Fairer message, Energylinx believe that providing customers with a Personal Projection with deals that are available through a particular site is the right thing to do.
We as a company have commercial arrangements with 30 of the 31 domestic energy suppliers in the market but not for every customer in ever circumstance.
There is no such thing as a free lunch and while comparison sites are NOT free, they are free to use and they can be impartial. Energylinx have been advocating transparency in the market for many years by encouraging the inclusion of commission fees on platforms and indeed the suggestion was included in the recent submission response to the Ofgem consultation on TPIs.
The transparency should be extended not only to TPI's but the suppliers and collective switch schemes as well.
Kenny Griffith, TPI Manager Energylinx
Posted on October 20, 2014 at 10:42 AM
October 2, 2014
Analysts have forecast that the 'Big Six' energy suppliers will lose a quarter of their customers by 2020 as millions of households will switch to smaller suppliers. Citigroup stated that the market share in the supply side of the 'Big Six' has fallen from 98% to about 92% in the last year, partly driven by anger about last autumns price rises.
The 'Big Six' is made up of British Gas, SSE, EDF Energy, E.On, Scottish Power and Npower and between them they control about 92% of UK households. Citigroup have predicted that this will fall to below 70% by the end of the decade as the market becomes more competitive.
According to the report "UK Energy Policy -Unwinding the Big 6", written by a research arm of Citigroup investment bank, some large companies could be driven out of the market as the report argues "If the supply market does develop as the current trends suggest and the available profit pool declines by circa 40% we may well see some participants simply running their supply business to maximise cash flow in the short term and exit the market at some point". Figures indicate that UK consumers have 3.8m accounts with smaller suppliers and 45.9m are with the 'Big Six'.
Posted on October 2, 2014 at 04:13 PM
October 1, 2014
16% of energy customers in the UK use prepayment meters. That is a total of 10.8 million and today national charity - Citizen Advice - have launched their 'Fair Play for Prepay' campaign after their research found that one in every six prepayment meter customers has their energy supply cut off due to high costs, difficulty topping up their prepaid meter or faulty meters.
The Citizen's Advice report "Topping up or Dropping out" revealed some of the bleak choices and challenges that pay-as-you go energy customers face. The research has shown that half of prepayment customer who had their supply disconnected last year are concerned about being able to afford to top up their gas or electricity meters. Citizen Advice say that shockingly, there are people being left without any energy as their credit had ran out and they were unable to get to a shop to buy a top-up as there is a serious lack of innovative ways to pay for energy top-ups. The report also said on average a household that has a prepayment meter spends £80 more a year on energy than a person on direct debit.
One of the grimmest findings by Citizens Advice is that there are consumers who are self-disconnecting (going without gas or electricity) because of increasing energy costs and unstable finances. There are many possibilities for unstable finances such as reduced working hours, losing their job, change of benefits or an illness can all have a negative effect on people finances which is then forcing them in to spend less on heating and lightening in their homes.
Energy Suppliers are not allowed to disconnect elderly, sick, disabled or households with young children in them between October 1st 2014 and March 31st 2015, however no such rule applies to consumers on a prepayment meter.
The report also had some other stark findings:
• Children live in half of the households that have prepayment meters.
• People who are on prepayment meters and self-disconnect are on the lowest incomes.
• Keeping the meter topped up is a major concern for more than half of people who have disconnected in the last year, up by six per cent since 2010.
• Disconnections can be as little as an hour to as long as several months.
• 43% of bureaux advisers referred cut-off prepayment consumers to a foodbank.
Gillian Guy, Chief Executive of Citizens Advice, said "Going without gas or electricity is a grave necessity not a choice. The budgets of many prepayment meter users are stretched so thin that not topping up their energy meters for a few days, or even weeks, is the only way to get by. It is very concerning that, as temperatures start to drop and the nights draw in, some prepayment consumers will be living in cold, dark homes because they can't afford to put money on their meters. Energy companies are doing the right thing by putting a freeze on disconnections for vulnerable households but industry, Government and the regulator need to look at how this can be extended to prepayment consumers too. Self-disconnection is just the tip of the iceberg when it comes to problems faced by prepayment consumers. Higher costs, a small or non-existent choice of tariffs and inconvenient ways of topping up are some of the extra challenges faced by pay-as-you-go energy consumers. That's why we've launched the Fair play for prepay campaign to help get a better deal for these households. Energy customers can get advice by calling our consumer helpline on 03454 04 05 06, go online at www.adviceguide.org.uk or visit their local Citizens Advice Bureau."
To find out more about Citizen Advice's campaign click here.
The 'Fair Play for Prepay' campaign is calling for:
• Better customer service and support with easier top ups;
• A fair choice of tariffs in line with other payment methods;
• A smarter prepay offer that works for consumers.
To sign the petition on Change.org for fairer treatment for prepayment meter customers, click here
Posted on October 1, 2014 at 05:01 PM