Any idea what company this is ?

Dellers

Some one working with my husband was telling him . They changed supplier. They pay by pre paid master card and the present age of spend is taken off the electricity bill. If you refer someone else they take another 5% off your bill. Its sounds like a pyramid scheme to be honest .

penrhyn

They are talking about Utility Warehouse.

There is a huge thread on it elsewhere on the site.

Brace yourself for a long read.

http://forums.moneysavingexpert.com/showthread.html?t=387161

Cardew

Yes it is the dreaded Utility Warehouse!

Must only be discussed in the thread referenced above as it is highly controversial - there are 33,000 'salesmen' trying to earn money.

Your husband has got things wrong. They have a cashback card that gives a 5% reduction off the amount spent in shops that accept the card - that discount is applied to your gas and electricity bill.

The problem is their gas and electricity is the most expensive in UK - hundreds of pounds more than the cheapest tariff.

You are correct that it is a form of pyramid scheme - but technically not pyramid selling which is illegal.

OldGreyFox

They do discount your bill if you refer someone else,but it depends on what services they take as to what percentage you recieve .

http://memberbenefits.utilitywarehouse.co.uk/html/discountplan.html

markharding557

They will work out more expensive for energy.
Use a comparison site instead

Dr.Shoe_2

It is a MLM business and almost by definition will be more expensive unless you can sign up a lot of people and they in turn can sign up a lot of people.

At the end of the day, they have to buy their gas, electricity and telecoms from the same sources as all the other suppliers. They also have to pay the infrastructure providers such as Transco, National Grid and BT to carry the "product".

In order to give you 5%, give the person who signed you up a small percentage and the person who signed them up a percentage (ad infinitim) then they have to write these discounts into the retail price of the product. Granted, their overheads are lower because they don't advertise and don't have to pay a sales force so they can give that to their distributors.

The only ways to justify a larger retail price is to either add value to the product or to promise the customer that they will eventually get cheaper energy as they start to sign other people up.

Amway, Kleeneze, Betterware et al add value by offering a personalised service and goods delivered to the door but utilities will be delivered to your home in any case regardless of who your supplier is.

It's a good business model and suitable organised and motivated people can make a fortune with a good MLM company but it is difficult to see how utilities can be marketed in this way.

Cardew

Dr.Shoe wrote: »

It's a good business model and suitable organised and motivated people can make a fortune with a good MLM company but it is difficult to see how utilities can be marketed in this way.

Agreed!

It depends to a large extent by people simply not understanding the complicated gas and electricity tariffs available from the various companies in UK.

It is marketed by some 33,000 salesmen who sell predominantly to friends and family who presumably trust the salesman and don't appreciate that the gas and electricity is the most expensive in UK - some 30% and £hundreds more expensive than the cheapest available tariff.