Are loyal energy customers LEGALLY penalised by their suppliers?

Cardew

BigAl,
We are in danger of getting at 'cross purposes' here.

I am in complete agreement with your 'philosophy' on the merits/demerits of energy pricing, and would be delighted if the bosses of the energy companies shared our view! Sadly they don't!

Confusion marketing rules!

You have only just joined MSE. However if you trawl back through several years posts, you will see that on the one hand Tesco Clubcard points or a 'free' bottle of champagne is an incentive many can't resist - even if it means paying extra £hundreds pa. On the other hand people are unaware/disinterested in energy prices.

Sadly, the bosses of the Utility companies know their market, and what produces profits - and it ain't consistently low prices.

BigAl99

Cardew wrote: »

BigAl,
We are in danger of getting at 'cross purposes' here...

Well it is kinda my thread - and the purpose was to ask wether it is right and proper that existing customers are effectively being charged more so that new customers can be effectively charged less by the same "supplier" for essentially the same product.

That's the purpose in a nutshell.
(I'd add a nutshell icon - but there doesn't appear to be one ).

I suppose the "supermarket" equivalent would be: would it be right for Tesco to charge their regular customers £3 a punnet of grapes whilst (in the same shopping queue) they charge the customer who is passing-through only £1 a punnet. That incidentally, would probably not be legal - it would be considered discriminatory, since all customers are supposed to get the same offers at the same time. But here, the model is (sensibly) in reverse - the regular customer is charged less (via loyalty cards and points). And it makes good sense to both supplier and customer. It is easy to understand.

This is what I mean when I say the "tariff" product appears to be abused thanks to its nature for the sake of larger profit margins and per-se as a product does not benefit the customer at all. It was a bad idea from the outset. It turns the traditional marketing model 180 degrees on its head and many customers fail to realise this. Suddenly they are supposed to be disloyal. And the "suppliers" are cashing in when this implicit need for disloyalty is not understood. Hence my earlier comment that it is all extremely deliberate smoke and mirrors. This is made worse when such a product is marketed as a "service", which clearly it is not. If it really were a service, they would be going out of their way to tell you when the service has been improved (traditional "service" marketing model). All they can actually offer is a different tariff, and they'd rather not tell you that (unless you are a new customer). But they will gradually eek your tariff up over time (whilst blaming rising raw costs) so clearly they can afford lower prices for new customers. And they don't appear to reduce your tariff by nearly as much as those succulent new offers when energy prices fall. So eventually you get the aforementioned 20% disparity! But then they can still claim they have passed on the cheaper raw enegy prices to customers (but omit to mention the 20%-and-growing disparity between new customers and old).

I now understand the product is a "tariff" and

"tariff" <> "service"

Sad but apparently true.

BigAl99

Marcusp wrote: »

That's the great thing about doing things online nobody knows who you are. Spooky eh!

Don't worry - Big Brother IS watching you...

BigAl99

But back to the point...

Marcusp wrote: »

And I sign into my account at least once a month to see if there are cheaper tariffs and also use a comparison site as well.

If the "energy suppliers" (who don't actually supply energy, it seems) were really offering a "service" (as it was originally touted as being - they were supposed to "find" you the cheapest energy by creating competition), then you wouldn't have to be paying them and then doing the work yourself.

It appears there's something rotten in the state of Denmark...

Pincher

BigAl99 wrote: »

But back to the point...



If the "energy suppliers" (who don't actually supply energy, it seems) were really offering a "service" (as it was originally touted as being - they were supposed to "find" you the cheapest energy by creating competition), then you wouldn't have to be paying them and then doing the work yourself.

It appears there's something rotten in the state of Denmark...

Competition means every company promoting their own products, and it is up to the consumer to "find" the best deal for himself/herself.

Checking tariffs is a lot easier than most forms of shopping,
you can do it in your underwear: you have to go out just to get a carton of milk.

brewerdave

E.ON_Company_Representative:_Brian wrote: »

Hello BigAl99,



The reason we do not simply change our customers from one tariff to another is more often than not, down to the terms and conditions. Ofgem regulations insist that we do not switch customers to contracted tariffs without customer consent.

Have to take issue with this statement Brian - many customers have been switched to a less competitive tariff at the end of their deal period without direct customer consent.
As an example,you may remember the fuss there was this time last year when a very popular SP tariff was ending.SP switched customers to a more expensive capped deal on the back of not replying to an email which many claimed to have never received. How does that fit with your statement about OFGEM rules??

Cardew

brewerdave wrote: »

Have to take issue with this statement Brian - many customers have been switched to a less competitive tariff at the end of their deal period without direct customer consent.
As an example,you may remember the fuss there was this time last year when a very popular SP tariff was ending.SP switched customers to a more expensive capped deal on the back of not replying to an email which many claimed to have never received. How does that fit with your statement about OFGEM rules??

Correct.

BG did exactly the same when their fixed price tariff ended on 01 May 10.

They switched their customers to the very expensive 2012 fixed price tariff(with penalty clauses for early exit) unless the customer opted out. This IMO is perhaps the worst BG tariff ever.

In other words they assumed the customer's gave consent - which is very different from giving consent and rely on apathy/ignorance/misplaced faith in BG.

Ken68

Thank you for the heads up BigAl. Am still with Ebico though am a low user so not losing a lot.
It was Cardew who alerted me to my previous high tariff Age Concern..Powergen..er..now EON.
To think I believed all that rubbish about looking after the old folk.
Stick around, we need you.

E.ON_Company_Representative

brewerdave wrote: »

Have to take issue with this statement Brian - many customers have been switched to a less competitive tariff at the end of their deal period without direct customer consent.
As an example,you may remember the fuss there was this time last year when a very popular SP tariff was ending.SP switched customers to a more expensive capped deal on the back of not replying to an email which many claimed to have never received. How does that fit with your statement about OFGEM rules??

Hello brewerdave,

I think what I was trying to say has been misconstrued. Yes, customers are switched to a like-to-like tariff if available, standard if not, if a tariff comes to an end. However we do not switch customers to a contracted tariff automatically.

An example of this is when switching automatically from a Price Protection tariff to a Price Protection Renewal when the original tariff ends. The renewal tariff will not contain any cancellation charges so a customer would be free to shop around if they wanted, without being penalised.

More often than not, prices have changed during the period of being billed on a Price Protection tariff. This often means that the prices of the renewal tariff will be higher. However as mentioned above, you will not be tied in to the tariff.

I’m not too sure how Scottish Power work with regards to their renewals. What I can say is that we will always send a letter to inform you of our plans a month or two before the tariff ends.

When you choose to take a tariff with E.ON we will always send you the terms and conditions in the post. These terms and conditions state that we will switch you to a similar or standard tariff when the tariff ends.

Thanks

Brian

undaunted

Cardew wrote: »

'Frying pan into Fire' comes to mind.

Most of the firms are exactly the same; the exception being Ebico and they are too expensive for most people.

:rotfl:I know just what you mean / would have to agree to be honest but what else can you do but take the custome elsewhere, even if you later have to repeat that process with someone else.

Ebico aren't necessarily such a bad deal in my area (not the cheapest, especially if happy to pay by DD etc but they are certainly not the most expensive either )