Are loyal energy customers LEGALLY penalised by their suppliers?

BigAl99

As an experiment, I thought I'd get an online quote from my EXISTING supplier: e-on.

I am on their old E.ON EnergyOnline tarif. This "product" is apparently not on offer anymore. However a "contractually identical" offer was available (i.e. it is an online account with monthly direct debit and dual fuel discounts - not "physically" different in any way other than name from the original). This is now called "E.ON SaveOnline 3" and it charges a whole 27% less for electricity, 15% less for gas, but (oh shock) does not provide the 2% discount for being online-managed. I assume the 2% is absorbed into the 27%!

This means that I am now paying a mean of around 20% more for my combined energy than a new customer for what is essentially the same "product".

Opinions please: whilst this is clearly not morally tenable, is it actually even legal?

I have been with e-on for three years now, but was not aware of any contractual lock-in to the original tarifs. But even if I were, if they can afford to sell electricity to new customers at 17.619p per kWhs, why are they still charging existing customers 22.38p per kWhs for the same electricity and the same lack of "paperwork"? - I cannot see why a different older name for the same product costs an extra 27%.

:think:

molerat

This new tarriff is dearer than my current eon tarriff so I am not being disadvantaged. The rates are 8% cheaper than my rate but with 16% less discount. It is not a fixed tarriff so can be increased at any time, is it a good bait to catch some fish ? The energy companies are changing rates all the time.

Premier_2

BigAl99 wrote: »

...This means that I am now paying a mean of around 20% more for my combined energy than a new customer for what is essentially the same "product"....

Why don't you switch tariffs if you think your current tariff is no longer competitive??? :huh:

Always a good idea to make regular use of the comparison sites to see if you are still on a good tariff. As molerate says, prices/deals are always changing.

BigAl99

Premier wrote: »

Why don't you switch tariffs if you think your current tariff is no longer competitive??? :huh:

Always a good idea to make regular use of the comparison sites to see if you are still on a good tariff. As molerate says, prices/deals are always changing.

Yes - I know all that, but the point was that the rates offered by the EXISTING supplier are competitive with the EXISTING supplier. This implies I should SWITCH to the existing supplier!

BUT since the product is essentially the same one with a newer name, I don't see why I have to go through the switching process to even SEE that offer, let alone take it up.

It's strikes me that the practice of witholding price decreases from existing customers via the mechanism of "subtle" changes to the product range is both anti-competitive and (possibly) illegal in some way. That is really what this question is about.

It means that the supplier has been "duping" existing customers about the actual cost of the product, and God only knows for how long - since this change in the name and the rates could have been in place for a whole year for all I know.

Think about that for a moment: 20% x Income from Existing Customers x 1 year = a very large amount of corporate dosh, which is all profit because the product HASN'T ACTUALLY CHANGED. It's just that the cheaper "new name" hasn't been passed on to the existing customers.

Any legal beagles about?

Premier_2

BigAl99 wrote: »

Yes - I know all that, but the point was that the rates offered by the EXISTING supplier are competitive with the EXISTING supplier. This implies I should SWITCH to the existing supplier!

... I don't see why I have to go through the switching process...
...

You don't need to go through the switching process which would typically take 4-6 weeks to change supplier; just call up your existing supplier and ask to switch tariffs - should be possible to do immediately

molerat

With E.ON you just change tarriff on line, Your Account > Switch Now. It is done instantly.

If you are on the standard energy on line with no extra version number you have been overpaying for some considerable time, for me it shows a £200 saving for switching !

As to your thread title, yes I suppose they are but it is the same with banks, telephone companies and ISP's. As the saying goes, if you snooze you lose.

BigAl99

Premier wrote: »

You don't need to go through the switching process which would typically take 4-6 weeks to change supplier; just call up your existing supplier and ask to switch tariffs - should be possible to do immediately

So I should check the existing supplier has not "renamed" the product (say) once a quarter? Surely they should be simply adjusting the product's price to match the offer.

I feel like I am not being understood here - yes I can see what I now have to do, but I don't see why it should be necessary - nor why this practice of "renaming then repricing" might be considered legal. Surely this is arguably fraudulent on the part of the suppliers?

Again - a professional legal beagle's viewpoint would be much welcomed here.

For comparison purposes: NatWest (bless them) actually phone me up now and again to point out when their existing product has been "replaced" by a more competitive one. I've always assumed that this is because they are "compelled" to do so. So is it merely a case of "laudible" behaviour for NatWest and "deplorable" behaviour for the likes of Eon?

molerat

As I have posted, all types of company do the same thing, It may be slightly immoral but since when have big business had morals.

BigAl99

molerat wrote: »

As I have posted, all types of company do the same thing, It may be slightly immoral but since when have big business had morals.

Like I say - usually when they are compelled to do so. Perhaps this would be a "good cause" for Martin to follow up?

Cardew

BigAl99 wrote: »

So I should check the existing supplier has not "renamed" the product (say) once a quarter? Surely they should be simply adjusting the product's price to match the offer.

I feel like I am not being understood here - yes I can see what I now have to do, but I don't see why it should be necessary - nor why this practice might be considered legal.

I have much sympathy with your grouse.

It is a practice not confined to Utility companies.

In fact with some banks it is even worse as you can't switch to a better accounts as those are only for new customers - or sometimes 'new money'.

I get really fed up with having to keep abreast of gas, electricity, bank accounts, telephone accounts etc to ensure I am getting the best deal and some 'bonus rate' has not expired.

Without fail every year my car and house insurance renewal notices show a huge increase. A phone call reduces the premium by 25% or so(with the same cover) "because you are a loyal customer"!!! A pity they have to 'try it on' each year in case I don't notice.

I doubt it is illegal, but it certainly is immoral.

dogshome

HiBigAl99 - I agree with your comments regarding the morality of tariff management, but the world has changed and although the word "Loyalty" is still spelt the same, the corperate world pronouces it as "MUG"

So far as Gas/ Elect is concerned I number my bills, and as each Qtly comes in I add it's Kw total and number of days covered, to that of the preceding 3 bills.
Then with a small adjustment to bring the number of days to 365, every 13 weeks I have an updated Annual consumption figure with which to hit the switch sites