Are MSEers responsible for higher prices?

Gorgeous_George

At least in part.

If companies such as USwitch are paid a fee when we transfer (£40 a time?), surely that money has to be recouped by the gas/electric companies.

The only way they can do this is to add it to our bills by way of increased prices. Maybe they ought to charge an exit fee like the mortgage companies do?

We could be adding £100's to our costs with the only winners being the companies such as USwitch.



GG

Ember999

Good point, makes you think, doesn't it?

Cardew

Interesting post.

To a certain extent this site is culpable in that it encourages constant swapping of suppliers to get moneyback.

The same can be said of ‘middle-man’ companies like Quidco(spelling?) that provide no added value.

I am not making any criticism of those who take advantage of these schemes, but the profits of this type of company are eventually borne by the public.

It is much the same with the major flight booking agencies. Many airlines have cheaper seats available on their own web-sites(and others like Easyjet and Ryanair do not let middlemen get a cut) However these agencies still make large profits which is passed on eventually in higher fares for everyone.

wowsavings

I agree and disagree.

Yes, the energy suppliers are aware that customers may not be with them for the long term and so they need to make sure that they cover any costs they pay.

However, thing of the money that they pay these switching sites as part of their advertising budget.

All companies want new customers and they have to pay for them. That could be through newspaper advertising, TV adverts, etc. The only thing with these is that there is no guarantee of getting a customer. However, when they pay a switching site, they are paying for an actual real life customer, so in that sense, it is lower risk than TV and newspapers.

These companies have marketing budgets in the millions, the switching companies get just a part of this.

Gorgeous_George

But how often do you change?

If you are getting cashback for changing, you could be encouraged to change even if there is little or no difference. It could even be worthwhile changing to a slightly more expensive supplier if the cashback meant you were in profit.

There may be case for exit fees or for contracts to be required to keep you with your new supplier for a reasonable period of time.

For example, in my last house my gas bill was about £20 per year. If I changed supplier every year, they would be losing out by having me as a customer. I could effectively have got my gas for free by using a comparison site with cashback.



GG

masonic

Well if it wasn't so easy to switch suppliers, there would be no reason for them worry about being competitive in the first place. Energy suppliers would probably have pushed up their unit prices more quickly than they have done already, so on the other hand we might be paying considerably more if it wasn't for these switching sites.

As far as an exit fee is concerned, it wouldn't be hard to incorporate this into the savings calculation done by these sites. They already include promotional discounts. All it might do is knock that energy company a few places down the list.