Time to make the 'big six' play fair
An alternative energy supplier has drawn up a charter to bring companies into line
Simon Read is Personal Finance Editor at The Independent. He edits the Saturday Your Money section and writes the Daily Money column and Wednesday’s Midweek Money section in i newspaper. He also writes for the news and business pages of the Independent and i newspaper and is a regular money commentator on TV station London Live. He has won numerous awards including Consumer Finance Journalist of the Year.
Saturday 25 February 2012
Not-for-profit power supplier Ebico has joined the growing campaign for fair energy by publishing a charter of consumer expectations which it has submitted to Ofgem, the industry watchdog, to be considered as part of its Retail Market Review.
Its Great Expectations charter – put together with the help of customers – sets out a series of moves that, Ebico says, would force the "big six" energy firms to be more open, fair and honest.
The firm hopes the charter will be added to energy company licences, forcing them to play fair. Specifically, the consumer charter would require energy suppliers to review customers' tariffs every year to ensure they are on the best value plan. It also calls for clearer and more consistent information about prices and fair treatment.
Energy firms would be expected not to treat customers aggressively, deceitfully or manipulatively. They would also have to agree not to try selling customers other products when speaking to them.
Ebico boss Phil Levermore said: "Despite some small efforts by the industry to clean up their act, our research shows that consumers still feel targeted by sales agents from energy companies. And this is just one example of the number of ways in which consumers get poorly treated at the hands of suppliers, and have as a result lost their faith in the industry.
"We want to put the power back into the hands of consumers, which is why we have put together the charter of positive expectations. We want Ofgem to embed the charter into supply licences as a legal requirement."
The charter was submitted to Ofgem this week, coinciding with the record annual profits announced by British Gas owner Centrica. The energy giant made £2.4bn last year while its UK subsidiary made £522m, or profits of £1.43m each day in 2011.
British Gas still has more energy customer than any of the other big six firms and the clamour for it to improve services and prices is growing, as our case studies below show. The firm hiked fuel prices in December 2010 and August 2011 by 24.9 per cent in total, adding £256 to the average bill.
Caroline Lucas, Green Party leader said: "Centrica's staggering profit announcement is yet another slap in the face for the 5.5 million British households struggling in fuel poverty."
Labour's Shadow Energy Secretary Caroline Flint said: "People will be shocked that when millions of families are struggling with their energy bills, big energy companies like British Gas are enjoying huge profits."
She said a Labour government would make energy companies, by law, guarantee that elderly customers would be offered the cheapest tariff for their gas and electricity.
But with the chance of a Labour government a somewhat distant eventuality, Ebico boss Phil Levermore believes action is needed now. "Consumer confidence in the energy industry is at an all-time low," he said.
Research released by Ebico today shows that despite a crackdown on doorstep selling, customers are still being targeted by energy companies using bullying tactics to persuade them to switch suppliers.
Reports of doorstep selling have dropped by almost half from 2010 to 2011, but more than a third of those approached by a company to change suppliers in 2011 say sales agents are aggressive and pushy, while 28 per cent say they find their approach confusing.
"The vulnerable and elderly, who suffer most as a result of high fuel costs, are often very susceptible to unscrupulous approaches," said Mr Levermore.
His firm charges all customers the same rate for their gas and electricity with no standing charges. It means that low energy users and customers on pre-payment meters can make considerable savings. The approach has helped Ebico attract 50,000 customers and any surplus it makes is reinvested into a trust, which supports initiatives to tackle fuel poverty in sustainable ways.
Great expectations charter
I expect that my supplier will:
Review my tariff annually to check I'm on the their cheapest plan for my energy use;
Provide information on the lowest price plan they currently offer and conditions attached;
Create a consistent format for publishing price plans expressed in plain English.
l Use a common standard method of bill estimation if no meter read is available;
l Never make me feel I've been treated aggressively, deceitfully or manipulatively;
l Ask me every 12 months if any credit on my account should be repaid.
l Ensure that anyone selling energy supply to me will give me a direct comparison using my actual use;
l Not try to sell me other products when speaking to me about non-sales matters;
l When I switch to them, tell me how to switch away, including any costs.
'British Gas misled me about price reduction'
Post-graduate student Amanda Simpson who lives in the west of Scotland was pleased to learn on British Gas' website that her prices were being reduced. But when she checked her bill, the reduction hadn't been made. "I rang British Gas and their customer service was terrible," she says. "I spent 24 weeks back and forth complaining to customer services only to be told I had to go to a complaints department! I was so mad that I took my complaint to the energy Ombudsman." She won the case, and British Gas was forced to refund the difference between what they said they would charge her and what they actually did. It then turned out no one in Scotland got the cheaper bills. "I've switched to Ebico now and really support their customer charter," said Amanda. "I'll never go back to British Gas."
'We've had to endure two cold years in our home'
The family of city worker Stewart Richardson has endured two years of cold-home misery after a British Gas mistake. The firm installed a new boiler in 2007 but things went wrong in 2009, leaving the home inadequately heated for the family's four children and left with unpleasant mould all over their bedroom. "We had around 20 visits from different engineers before one spotted the problem was a broken pipe because of faulty installation," said Stewart. "They admitted their mistake but offered just £200 compensation for our two years of misery. We've had a cold house, a bedroom that needs redecorating and higher bills through the inefficient boiler not working properly." Fed up with poor customer service, Stewart is now taking his complaint to British Gas bosses – and thinking of switching supplier.
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