Simon Read: The sad tale of high energy prices and mis-selling continues

 

Energy firms have angered a lot of people in recent months. Rising prices were followed by soaring profits and all the while many of the Big Six firms were put under investigation for unfair charges or widespread mis-selling.

But just when you thought things couldn't get any worse, it's been a week of slapped wrists and potential fines for the firms. On Monday French-owned EDF Energy was rapped by Ofgem for the poor way it dealt with customer complaints. The Energy Watchdog reported that more than half of EDF's customers who made a complaint last year were dissatisfied with how it had been handled. The figures left the company with the worst record for complaints-handling of the Big Six for the second year running.

Then – on Wednesday – Ofgem launched a new investigation into mis-selling claims against E.on, the only Big Six energy supplier which continues the odious practice of flogging its gas and electricity on doorsteps. The watchdog is already investigating the sales tactics of three of the Big Six firms, Scottish Power, SSE and nPower. And its recent investigation into EDF – them again! – resulted in the company agreeing to pay out £4.5m after staff were found to have made misleading claims to customers.

Recently I've spoken to several of the bosses of the Big Six energy firms and they all seem honourable men, keen to point out what they're doing to help customers who are struggling to meet the cost of heating their homes.

But tinkering with tariffs or bleating about the costs of hitting future investment targets do little to help those who are still in fuel poverty.

Research from uSwitch published on Thursday suggested that some four million households are at present behind in their payments to the Big Six. The average amount owed, according to the comparison site, is £131. To the bosses of the energy firms – who command six-figure salaries – the odd £131 is chicken-feed. But to the families having difficulty paying their bills, that amount can feel like a fortune.

The energy firms say they now are much more prepared to talk to struggling customers and help them to find ways to pay their bills. That's to be commended. But it doesn't deal with the problem.

The fact remains that millions struggle to pay bills. That can lead to disastrous conclusions. Those that choose to cut back on heating their homes to save costs are at risk of adding to the growing number of excess winter deaths because of fuel poverty, estimated at 8,000 a year in a recent report.

Others that turn to expensive short-term lenders to pay their bills can quickly end up in a debt spiral, leaving them unable to afford to pay the interest on their debts, let alone be able to pay their new bills.

One solution – supported by Energy Minister Ed Davey – is collective purchasing. But the Big Switch campaign by consumer organisation Which? to get cheaper home energy deals has foundered as energy firm after energy firm refused to take part.

The consumer group has persauded 250,000 people to sign up, demonstrating the massive demand for better deals. So it was pleasing this week to see ethical supplier Co-operative Energy agreeing to get involved. The Co-op – which was launched last year – said it would take part after Which? agreed to allow suppliers to use their existing tariffs in the bid process, which will take place later this month.

A reverse auction will be held with Which? informing its supporters which deal looks best and then making arrangements for them to switch to the better tariff.

The consumer body has been criticised for planning to make a reported £40 for every person who switches under the scheme. Indeed a rival switch campaign has been set up by comparison website Energyhelpline, with a promise to undercut the charges from Which?.

But if the campaign does help people switch to a better enery tariff, it will be worth it.

A similar more localised scheme which has garnered support from Mr Davey is a collaboration between not-for-profit organisation thePeoplesPower.co.uk and the Grand Union Housing Group.

It aims to benefit households who might not be used to shopping around on the internet, rather than then 80,000 or so who already switch supplier every week.

The community company charges only £2 for switching and reckons it needs only 10,000 or so to be able to negotiate keener deals with suppliers.

Mike Shamash, founder of thePeoplesPower said: "Our sole aim is to get people the cheapest gas and electricity."

s.read@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

    Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

    £50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

    Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

    £13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

    Ashdown Group: Training Programme Manager - City, London

    £40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

    Day In a Page

    Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

    The secret CIA Starbucks

    The coffee shop is deep inside the agency's forested Virginia compound
    Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

    How the Establishment closed ranks over fallout from Nessie 'sighting'

    The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
    One million Britons using food banks, according to Trussell Trust

    One million Britons using food banks

    Huge surge in number of families dependent on emergency food aid
    Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

    2,500 years of history in 3,000 amazing objects

    Excavation at Italian cafe to fix rising damp unearths trove
    The Hubble Space Telescope's amazing journey, 25 years on

    The Hubble Space Telescope's amazing journey 25 years on

    The space telescope was seen as a costly flop on its first release
    Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

    Did Lord Ashcroft quit the House of Lords to become a non-dom?

    A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
    Apple's ethnic emojis are being used to make racist comments on social media

    Ethnic emojis used in racist comments

    They were intended to promote harmony, but have achieved the opposite
    Sir Kenneth Branagh interview: 'My bones are in the theatre'

    Sir Kenneth Branagh: 'My bones are in the theatre'

    The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
    The sloth is now the face (and furry body) of three big advertising campaigns

    The sloth is the face of three ad campaigns

    Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
    How to run a restaurant: As two newbies discovered, there's more to it than good food

    How to run a restaurant

    As two newbies discovered, there's more to it than good food
    Record Store Day: Remembering an era when buying and selling discs were labours of love

    Record Store Day: The vinyl countdown

    For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
    Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

    Mary J Blige and Will.i.am to give free concert

    The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
    10 best tote bags

    Accessorise with a stylish shopper this spring: 10 best tote bags

    We find carriers with room for all your essentials (and a bit more)
    Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

    Paul Scholes column

    I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
    Jessica Ennis-Hill: 'I just want to give it my best shot'

    Jessica Ennis-Hill: 'I just want to give it my best shot'

    The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...