The energy industry’s offer to loyal customers.
As the energy industry congratulated itself on ‘record high’ numbers of customers switching supplier (1), Citizens Advice said that “…too many loyal customers still are being ripped off simply because they don’t switch” (2)
The supply companies put their faith in competition to ensure all customers pay a fair price. They oppose the government’s plan to cap bills.
But as Dieter Helm, the independent expert, says in his report for the Prime Minister:
“There will always have to be a default tariff for those with better things to do than trawl the internet trying to comprehend the myriad ‘deals’ and ‘offers’” (3)
The industry is pleased to point to the “nearly 60” competitors now offering deals in the market. It has research to show how pleased most of the switchers are.
Yet 13 million households are still overpaying on tariffs shown to be unfair. Why don’t they switch?
Prof. Helm suggests one general reason above.
Here’s another: trust (or lack of). For example, dual fuel and direct debit contracts are non-negotiable for the best deals. On the second point, Go Compare (4) recently estimated energy companies holding a cash surplus on customer accounts of £980 million.
Switchers may not be overcharged but in the short term are overpaying anyway.
1 Energy switching hits record high in 2017, Energy UK, 10/01/18
2 Too many loyal energy customers being “ripped off” Citizens Advice, 11/01/18
3 The cost of energy, Professor Dieter Helm, BEIS, 25/10/17
4 Overpaying on your energy bill, Go Compare website, 15/01/18