Say No to price comparison

Cardew

Plushchris wrote: »

I dont buy it, if the energy companies stopped paying comparison sites money do you really think they would take that money off of peoples bills?

If they dont pay the comparison sites that money it would get spent on other forms of obtaining customers, so lots more annoying TV ads etc.. Not lower bills.

If you really think bills would be lower if comparison sites were suddenly done away with you must be deluded.

Don't often disagree with you BUT;)

Obviously I agree that given the 'confusion marketing' with thousands of permutations of tariffs, it is almost impossible to find the best tariff without a comparison website.

However, as I stated in Post#2, the downside is that the current system of comparison websites all vying for our custom are a huge overhead that is paid for in higher prices:

They encourage the 'Tarts' who switch for money-back every few months(not a criticism of those who indulge in that practice)

They actively encourage people to switch; sometimes to a more expensive tariff. So many people are seduced by champagne etc and/or an initially lower Direct Debit.

Huge numbers of staff are employed at the Utility companies to cope with the switching(churn)

If anyone doubts the sort of sums involved, U-Switch was sold years ago for £210million.

The solution would be a single 'independant and official' comparison website run by, say, the Energy Saving Trust(or even MSE!) and either funded by the Government or by a levy on Utility suppliers.


One website, no cashback/inducements, less churn!

IMO getting rid of these parasitic organisations would have a considerable impact on our bills.

jalexa

Cardew wrote: »

They encourage the 'Tarts' who switch for money-back every few months(not a criticism of those who indulge in that practice)

OK, I see the point that some are making, something I overlooked through only ever going for "fixed-term" tariffs.

So if were are going for "regulatory action" my suggestion would be at maturity automatic transfer either to the supplier's lowest priced universally available tariff (or a maturity tariff if lower) but with 28 days to cancel without penalty. The "lowest priced" having been calculated on a "Confidence Code" basis.

Plushchris

Cardew wrote: »

Don't often disagree with you BUT;)


They encourage the 'Tarts' who switch for money-back every few months(not a criticism of those who indulge in that practice)

I'll agree with you on the fact that was once the case, however I think the energy companies have put the nail in that coffin by imposing exit fees on almost all non-standard tariffs

Gone are the days of being able to "trouser" (using the terms of another well known poster ) cashback every few months, and also gone are the days of massive cashback payments (£100+ payments were all the rage a couple of years ago)

I do agree that comparison sites encourage churn, but then even MP's are going on record to say "If you dont like it then switch"

Uswitch was sold for £210million but dont forget Uswitch isnt just about the gas and electricity market, they must make a killing on the insurance sales...

grahamc2003

Plushchris wrote: »

I dont buy it, if the energy companies stopped paying comparison sites money do you really think they would take that money off of peoples bills?

If they dont pay the comparison sites that money it would get spent on other forms of obtaining customers, so lots more annoying TV ads etc.. Not lower bills.

If you really think bills would be lower if comparison sites were suddenly done away with you must be deluded.

Well I'm deluded then, since I think the cost could come off bills (remember 'coming off' here means 'not going up so much' and we are probably talking a few pence, so it would be lost in the noise anyhow).

The increase could be less in several ways - the company deciding to simply cut the advertising/customer requisition budget by the amound paid to comparison sites (I'm not saying they would or even if that is preferable, I'm just saying how it could come about). If profits are regulated, and cutting costs results in 'excess' profits (fat chance, but I'm just saying what is possible) then chopping a budget could cause the regulator to limit increases. (again theoretically. My view is the regulator like high prices as much as the suppliers do).

I agree with others who have posted that a single, accurate and uptodate comparison site, free to use with no cashback and no referral fee would be more preferable, and cheaper, than the current system. An even better system imv would be to take away the need for a comparison site, and have just one supplier (just like the good ol days) with perhaps a small set of tariffs to choose from. Much as I think free markets are usually the best way of doing things, experience of the esi has now, imv, proved otherwise in this case.

In itself this single cost atm is probably almost insignificant, but if you add up all these new costs suppliers have to bear (and pass onto us), then they are substantial. My point was that I'm now beginning to think the whole privatisation was wrong, and has simply caused masses of expensive effort on things which have little or no benefit in getting electricity into our homes, and the considerable disadvantage of hiking our bills substantially - the current cost under discussion is just one of those.