We All Pay Now

Cardew

In The Beginning

It was almost impossible for a consumer to work out which utility company provided them with the best tariff. So most didn’t bother and utility companies took advantage of that fact.

So along came a comparison site and made it easy for us to change.

Then came another, and another and still more!

Subtle methods were now employed to ‘steer’ the customer toward a certain company – no doubt the bigger the commission paid by the utility company, the greater the incentive to point customers in the direction of that company.

Now that these comparison sites were in competition with each other they had to offer incentives for us to use their services, so cheap champagne and cash-back schemes were introduced – amazing how the chance of something for free causes such excitement.

This freebie is an added incentive for some to change and change and change suppliers and each time the comparison site rakes in more commission.

I don’t know how much the utility companies pay out in commission but at £50 or so a time, it must be many £Millions. On top of that the costs involved in setting up new, and cancelling old, accounts must be staggering.

Now let me think! Where do the utility companies get that money from? Ah yes – its all of us consumers.
So In The End

We all Pay

Ken68

The world is full of brokers, Cardew.
You could say the same thing for The Consumers Association, or trade union demands, or Chamber of Trade cartels, or the demands of the mistress to the Chairman of Gritish Bass.
Everyone passes on their expenses to the next poor sod.
My savings of £100 a year by moving to EBICO are OK, because they don't pay commission.

masonic

My feeling on this matter is that the commission must, at least in part, come out of their normal advertising budget anyway. If these comparison sites weren't around, suppliers would probably be spending a lot more on other forms of advertising. I would also imagine that the added competition has had something of a positive effect on prices.

As far as us all paying for this situation, that is probably true to some extent, but those playing the game end up better off than those that don't.

I'm surprised that nobody has come along and pitched a better cashback offer to us consumers. There is always a lot of talk about competition between the energy suppliers; perhaps what we need is more competition between the comparison sites.

Cardew

Ken/Masonic
It must be really easy to set up a comparison site.

It would be ideal if Ofgem ran a site under their auspices(subcontracted the running to a company) and charged utilities a nominal sum to cover expenses. This would become the 'official' site and we could be assured of all the tariffs being displayed accurately without the distortion that we currently see.

Ebico are well known on this forum, but I would wager a bet that the average consumer has never heard of them because they(rightly) don't advertise Nationally. An official site would benefit a company non-profit making company like Ebico, who serve our interests better that the major players.

Ken68

After Trevor McDonald's show last night, could well be more activity on the comparison front.
Martin was there showing the detail , and spokemen for Energy Retail Association, U Switch, Energywatch,and OFGEM. Not in the one room all at the same time.
Definate push for consumers to move. Didn't hear a mention of the rogue doorstep 'transferrers'.

tawnyowls

I hope this becomes a push for the energy companies to be forced to use the same way of working out a tariff. I've been to 4 different comparison sites, and they all say I'd be (slightly) better off with British Gas for my electricity. Now this didn't make sense to me, as apparently BG's customer's are leaving in droves because they're charging the highest proces. So I decided to do my own checks, but it's so complicated! For instance, company A says it costs 10.1 pence for the first 250 units, then it's 9.5 pence after that, whereas company B says it's 9.8 pence for the first 750 units and then it's 10.2 after that, and so on. I can't see why they can't be forced to just say how much it is per unit for each particular rate. I mean, phone companies can do that - it's so much for local, national, and international, depending on day, evening or weekend. Why should gas/electricity be any more complicated? Seems to me it's just a way of hiding the true cost.

masonic

tawnyowls wrote:

I mean, phone companies can do that - it's so much for local, national, and international, depending on day, evening or weekend. Why should gas/electricity be any more complicated? Seems to me it's just a way of hiding the true cost.

What about the dozens of different 'local' and 'national' rate prices, not to mention the cost of calling mobile phones and other specialised numbers. I don't think there is anything more complicated than phone companies' tariffs. I have a list of all BT's call charges and it's 31 pages long (not even including international calls)! :eek:

Ken68

Don't suppose you can blame companies obfuscating the tariffs when they are in difficulties. The investors wouldn't like it if they didn't do something to correct a sliding share of the market.
I see the comparison services have to submit to an Energywatch Audit.

http://www.energywatch.org.uk/uploads/confidence_code.pdf#search=%22single%20tariff%20energy%20provider%22