MSE News: Energy firms ordered to play fair on prices – Ofgem

[Deleted User]

Widelats wrote: »

I have a learning disability called Dyscalculia, i can't figure out bills or units or whether its too much or too little or what, hopefully it will tell me straight in future.

I don't use much, my gas bill is £89.50 and that has just arrived today, that is for gas through the winter months from October to now.

I have a friend with dyscalculia. What I did for her was to make a simple "traffic lights" chart, based on her usage the year before, showing how much I'd expect for her to pay on each quarter's bill.

It showed the "green light" for an OK amount she could expect to pay, a "yellow light" for caution, and a "red light" for when she was most likely getting ripped off. I did the same for her mobile bills, home phone and broadband too. It helped her out no end. Maybe you could get someone to put together something similar for you?

Paulgonnabedebtfree

Although it wasn't in the remit of the report, I still feel that it is scandalous that government are raking in 5% VAT for this.
I do realise that there are more things being done lately such as free cavity wall insulation for some, cold weather payments etc., but I would be interested to know what they spend and what they make from this 5% VAT. I imagine it's a bit like road tax where the money isn't ring fenced and more is received than given.
The main problem with abolition would be the energy companies seeing it as a green light to up the prices more.

savemoney

The vat was added to bills when they scrapped the poll tax. If they scapped 5% vat then the money lost would need to be recouped on other things

backfoot

I sense the announcement has some teeth. Ofgem are in the last chance saloon for themselves and I hope to see some signifcant improvements overall.

I believe Ofgem have been too far away from the sharp end of the retail market,but I think Consumer Focus have done a very good job at bringing them up to speed on the Supplier manipulation of the market.

Hopefully,we will see an end to it.

KimYeovil

What teeth? What hope? Nothing being done about exit charges on variable tariffs (where the variation can be x-hundred percent). Nothing being done about unfair and unjustifiable excess pricing of standard tariffs compared to online direct debit tariffs. Imposition of daily standing charges (it seems) on all standard tariffs.

backfoot

KimYeovil wrote: »

What teeth? What hope? Nothing being done about exit charges on variable tariffs (where the variation can be x-hundred percent). Nothing being done about unfair and unjustifiable excess pricing of standard tariffs compared to online direct debit tariffs. Imposition of daily standing charges (it seems) on all standard tariffs.

I don't know whether the next 8 week consultation period covers public submissions.

If it does,perhaps you could try and get your concerns across to the responsible parties.

I think Scottish Power are already being investigated on the one aspect that you have mentioned.

As you know, I am raising the visibility of one pricing aspect (another thread) to test whether it is covered. I believe,reading the reports, there will be this initial period of change then other specifics can also be challenged on an ongoing basis. Ofgem say they will react more quickly in future.

I agree with you on things like exit fees and have tried in various ways to get that message across. We can only keep trying, but it often needs direct dialogue with the decision makers, not just a moan here (which we all do).:)

The proof of the pudding!

KimYeovil

backfoot wrote: »

I think Scottish Power are already being investigated on the one aspect that you have mentioned.

As I already mentioned on this thread this is one of the more gob-smacking confusions and contradictions of the initial reports of the reports - surely Scottish Power's £150 prompt payment discount was a good thing and allowed most quarterly cash payers to receive a very good price that, on average, was the same as that paid by direct debit payers. The only people who did not receive it were those who did not pay their bills on time.* According to Ofgem this is a bad thing? According to Ofgem it is only quarterly payers who should bear the costs of poor payers and bad debts and they should continue to be unfairly charged. I just don't get it.

*Okay, there is a concern that with crappy outsourcing to TNT or whomever instead of Royal Mail bills could arrive too late. But that just means the time to pay should be changed - not that the discount should be abandoned.

backfoot

KimYeovil wrote: »

As I already mentioned on this thread this is one of the more gob-smacking confusions and contradictions of the initial reports of the reports - surely Scottish Power's £150 prompt payment discount was a good thing and allowed most quarterly cash payers to receive a very good price that, on average, was the same as that paid by direct debit payers. The only people who did not receive it were those who did not pay their bills on time.* According to Ofgem this is a bad thing? According to Ofgem it is only quarterly payers who should bear the costs of poor payers and bad debts and they should continue to be unfairly charged. I just don't get it.

The Ofgem report itself says'

3.37. We also have concerns over whether one supplier is complying with standard licence condition 27.2A on cost reflectivity between payment methods66. ScottishPower‘s tariff differential between its dual fuel standard credit and direct debit offerings seems well above our understanding of the difference in the costs to serve these two types of customer. We are therefore announcing today that we have launched a formal investigation into ScottishPower‘s compliance with the relevant licence condition67. '

I may not be as up to speed as you on this.(you are on the ball with standing charges,first tier, payment methods, discounts etc.).

The above ,however, reads to me like they are saying, the DD option is far too beneficial compared with standard credit. By looking into it, aren't they supporting your view?

If the cost differential for each payment method is fairer,more cost reflective and more balanced,then I am not sure we can complain.

I may be missing the point.I,m sure you will let me know.:)

davidgmmafan

That condition kinda suggests that prepayment should be more expensive, which was the case before.

What's the point of Ofgem if it creates or enforced rules which are to the detriment of consumers? Just hand it over to Consumer Focus and get rid of Ofgem. I'm sure they could doa lot more with its budget.

JasonLVC

I don't know why the utility companies have managed to create a billing and marketing arrangement that is confusing and illogical.

Take a gallon of petrol, it goes up and down in price depending upon various factors.

Take your broadband line, it too may go up over time as cost/overheads increase for the provider, same with mobile telephones too.

So why do utility companies have one basic commodity to sell (gas/electric) and then have different pricing levels for the same product. I've been on tarrifs called SOL12, SOL18, etc a different priced version of the offering before it and so someone who joined before me gets a cheaper rate than someone who joined after me or vice versa.

I'm not sure how such an arrangement is in the consumer interest (ie, undercharging one customer at the expense of another based on the time the customer joined).