MSE News: The easy way to navigate the energy market maze

geordie_joe

Plushchris wrote: »

But the comparison sites are not the enemy here, they are accurate when you put the right information in (and look at the information displayed on them)

I have used many comparison sites many times, and no matter what figures I enter they all come with npower are the cheapest. Is it a coincidence that npower pay the most commission?

I have also worked out the figures for myself and found the comparison sites are actually wrong.

Another point, last year I entered random figures into a comparison site. It said I could save around £100 per year if I switched to npower for both. But when I checked the figures I found that I would save £200 on my electricity bill switching to npower, but would pay £100 more on my gas.

Unfortunately the figures I used were much higher than my real figures. But then point is, if the figures were real and I had followed the comparison site I would have saved £100 per year by switching both. But by doing my own calculations I could just switch the electricity and save £200 per year.

The reason the comparison site didn't tell me that was it makes double the commission if you switch both.

Another example. I got my gas bill today £68.33, several comparison sites have told me the best option is to switch to npower and I'll save 10 to 15 quid. The ebico web sites says I would have only paid £27 if I'd been with them?

Which is no surprise to me, because I switched to Ebico 6 months ago. But I was already with southern electric, and even though ebico told me I had been switched, southern electric have said I didn't switch to ebico, I just switched my tariff with them to an Argos Online tariff.

According to my bill they charged me £22 for the gas I used, and the rest was the standing charge. Ebico would have only charged me £27 so I'm switching. I don't care if "Southern Electric don't like you switching to Ebico", I'll switch to someone else then switch to ebico.

Sorry for the rant, but I didn't switch tariffs, I switched supplier. And I didn't get a letter telling me I had switched tariffs not supplier, and I didn't get a letter with an Argos card in it (I would have noticed, and read it).

Poosmate

KimYeovil wrote: »

Irrelevant nonsense! If you are on a direct debit you are paying in advance - you are always in credit. If you lose your job or circumstances change then you know in advance - you adjust your subsequent useage to suit your new income.

It's not irrelevant nonsense. I would love to know how many people would be able to continue all of their obligations in full if they were to turn up for work on Monday only to find the doors locked and hear on the news that their company had gone bust. Not everybody receives notice of redundancy and not everyone is entitled to redundancy pay. I believe this is what Oakhouse was referring to.

Poo

Plushchris

geordie_joe wrote: »

I have used many comparison sites many times, and no matter what figures I enter they all come with npower are the cheapest. Is it a coincidence that npower pay the most commission?

Have you got any evidence that Npower pay the most comission? A link would be nice.

geordie_joe wrote: »

I have also worked out the figures for myself and found the comparison sites are actually wrong.

Another point, last year I entered random figures into a comparison site. It said I could save around £100 per year if I switched to npower for both. But when I checked the figures I found that I would save £200 on my electricity bill switching to npower, but would pay £100 more on my gas.

So you didnt bother checking on the comparison site if it would be cheaper to just switch one fuel? All the comparison sites I've used have this feature.
And how was the comparison wrong? You would still save £100 would you not?

geordie_joe wrote: »

Unfortunately the figures I used were much higher than my real figures. But then point is, if the figures were real and I had followed the comparison site I would have saved £100 per year by switching both. But by doing my own calculations I could just switch the electricity and save £200 per year.

By using the comparison site properly you could have done the same thing and not gone to the effort of working it out yourself.

geordie_joe wrote: »

The reason the comparison site didn't tell me that was it makes double the commission if you switch both.

Again, I'd be very interested in your evidence for this, I'm sure there would be lots of others on this site interested in seeing the the comission breakdown the sites get, you seem to know a lot about it, please share!

geordie_joe wrote: »

Another example. I got my gas bill today £68.33, several comparison sites have told me the best option is to switch to npower and I'll save 10 to 15 quid. The ebico web sites says I would have only paid £27 if I'd been with them?

Comparison websites work on annual figures, putting a quarterly bill into any of them will give you a wrong comparison.

Many many people have posted on here saying the comparison websites are incorrect and to my knowledge none have been able to prove that when asked for the figures they were using so if you can provide all the figures you were using then we would be able to see if the website you were using was indeed incorrect..

It usually boils down to one thing, the comparison websites are only as good as the person using them, you put crap in, you'll get crap out.

Plushchris

AMO wrote: »

Yeah, I agree that price comparison websites are in it for themselves. You won't see Utility Warehouse being offered for example even though they come cheapest in many situations simply because they don't pay commission. Same with car insurance really - you won't get Direct Line popping up. These price comparison websites get a lot of money when they switch you. Much like pension advisors that like switching people with large pots because they make percentage commission on the newly bought units - churning is very profitable for them.

Utility Warehouse is on all of the comparison sites I've used so not sure why you dont see them?

Maybe its because you dont scroll right down to the bottom of the results table, they are usually in the last quarter of the results as in actual fact they are one of the most expensive suppliers in most cases.

Cardew

AMO wrote: »

Yeah, I agree that price comparison websites are in it for themselves. You won't see Utility Warehouse being offered for example even though they come cheapest in many situations simply because they don't pay commission. Same with car insurance really - you won't get Direct Line popping up. These price comparison websites get a lot of money when they switch you. Much like pension advisors that like switching people with large pots because they make percentage commission on the newly bought units - churning is very profitable for them.

Without doubt the comparison website are there to encourage people to switch, and hence increase their commission.

However perhaps you can give an example of a comparison website that doesn't show Utility Warehouse? As far as I am aware they all include that supplier. However as they are without doubt just about the most expensive Gas and Electricity supplier in UK, they are always very near the bottom of all lists.

oakhouse13

http://www.affiliates4u.com/forums/commission-junction/73757-calling-all-simply-switch-affiliates-want-earn-14-energy-application.html

This is how the switching companies talk to their affiliates all the time - they pay bonuses for meeting targets so affiliates of affiliates refer through them rather than any other switching site.

Just far too many layers of sales each adding complexity and taking commission that should be going into lower prices that everyone pays.

The reference to lets spin the news so it is all about switching makes me absolutely mad. They're not interested in what should be news that is best for the country i.e. cutting your consumption.

I will dig out the screen grabs of the tariffs I complained about earlier. I think they are a good demonstration that comparison sites and utlity companies:

"contribute to price discrimination, which can cause different customers to pay higher prices, an outcome that may be acceptable in some markets but may lead to undesirable consequences in others. For example, if the customers with the least bargaining power also tend to be those with the least ability to pay, such discrimination may be deemed particularly undesirable."

This is not any consumer product, it is life saving. The tariff I took out, I can see how some people will have taken it out at the same time as me as the cheapest tariff but through no fault of their own it will be the most expensive while consumers like me in a strong bargaining position will get the lowest price.

Cardew

oakhouse13 wrote: »

http://www.affiliates4u.com/forums/commission-junction/73757-calling-all-simply-switch-affiliates-want-earn-14-energy-application.html

This is how the switching companies talk to their affiliates all the time - they pay bonuses for meeting targets so affiliates of affiliates refer through them rather than any other switching site.

Just far too many layers of sales each adding complexity and taking commission that should be going into lower prices that everyone pays.

The reference to lets spin the news so it is all about switching makes me absolutely mad. They're not interested in what should be news that is best for the country i.e. cutting your consumption.

I will dig out the screen grabs of the tariffs I complained about earlier. I think they are a good demonstration that comparison sites and utlity companies:

"contribute to price discrimination, which can cause different customers to pay higher prices, an outcome that may be acceptable in some markets but may lead to undesirable consequences in others. For example, if the customers with the least bargaining power also tend to be those with the least ability to pay, such discrimination may be deemed particularly undesirable."

This is not any consumer product, it is life saving. The tariff I took out, I can see how some people will have taken it out at the same time as me as the cheapest tariff but through no fault of their own it will be the most expensive while consumers like me in a strong bargaining position will get the lowest price.

Yet again we have someone defining a problem(the easy part) but not proposing a solution(the difficult part!)

Of course Comparison Websites make their money by people switching through them.

MSE is financed by referrals as Martin freely admits - this site shows the links that make MSE money and those that don't.

Comparison websites, Quidco etc - (even MSE) are parasitic in that the £millions they are paid is reflected in the higher prices we all pay for our gas and electricity.

That said, such is the complexity of the tariffs on offer, the comparison networks offer an easy way to compare prices and conditions of the many combinations of tariffs.

Surely if a company offer a discount for payment by DD, nobody should commit to payment by that method if they consider their ability to pay by DD is likely to be compromised?

So I can't really understand what solution you are proposing?

Plushchris

oakhouse13 wrote: »

The reference to lets spin the news so it is all about switching makes me absolutely mad. They're not interested in what should be news that is best for the country i.e. cutting your consumption.

Where does it say "lets spin the news" in that article?

oakhouse13

The solution I am proposing is much simpler, transparent prices that are no so complicated almost all consumers either do not have the time or are not mathematically minded enough to understand so they have to rely on a complex financial calculation deon by a comparison site that has a vested interest.

This would bring far more consumers into the marketplace, far more than at the moment because I believe that most people are like me and do not trust a salesman whether that sales person is a comparison table or an introductory offer or knocking on your door.

Lewis makes money from information by chance when that information results in a sale. He is not a salesman. I admit, I am very biased against sales & marketing and I would guess you both work in sales. When I read that £90 was on offer for referring just five consumers to switch and old people economise on fuel because it is too expensive, I object and want to change that.

oakhouse13

My tariff - nPower Go Fix 2

£110 discount for direct debit payment paid 12 months after taking out the tariff. Free to leave Easterish time or pay a £20 per fuel penalty to switch before.

At the time I took this out I looked at how other tariffs were structured. Some offered a huge discount for direct debit payment - twice what Sainsburys offered for example. You pay for twelve months and only then are refunded in effect your discount, it is not paid monthly.

In the tables and I would imagine all comparison sites do the same, the tariff was shown with the £110 taken out - so it was at the top of the table along with other tariffs using the same technique.

Over the coming 12 months, there's a chance some people who took out this tariff will not have the money to pay their direct debit through no fault of their own. They will then loose the £110, possibly be charged by their bank, will be put onto a standard tariff while people ike me will receive the discount and a lower than average tariff when I am not most in need.

They would have been better off on a less risky tariff, for example the Sainsburys one.

In this example, so called direct debit discount actually sales technique is used to:-

"contribute to price discrimination, which can cause different customers to pay higher prices, an outcome that may be acceptable in some markets but may lead to undesirable consequences in others. For example, if the customers with the least bargaining power also tend to be those with the least ability to pay, such discrimination may be deemed particularly undesirable."

Prices need to be much simpler so there is no need for consumers to buy inefficiently via middlemen who do not actually produce any actual gas or electricity or build power stations or wind farms.