British Gas trying to persuade me to stay

Scottish_Power

Backfoot I have requested a response on this issue and I will update as soon as I can. Thanks David

bob_bank_spanker

I believe BG are offering a new tariff with a 200 credit after 12 months - certainly this was what was offered to me (not that you will prise me off my edf fixed tariff!), if they are within their cooling off period I think this covers them legally. Ethics are another question entirely.

jalexa

bob_bank_spanker wrote: »

, if they are within their cooling off period I think this covers them legally.

That might, but...

The losing supplier is not informed of a (proposed) transfer until the expiry of the cooling-off period, at which point there are only certain defined grounds for objection (specified in SLC14.4). I conclude it is likely that British Gas are acting after the expiry of the cooling-off period, so no "legal cover".

Ethics are another question entirely.

Indeed, but worse none of the reports of the £200 inducement have been clear about the qualifying terms and payment date of the £200.

backfoot

bob_bank_spanker wrote: »

I believe BG are offering a new tariff with a 200 credit after 12 months - certainly this was what was offered to me (not that you will prise me off my edf fixed tariff!), if they are within their cooling off period I think this covers them legally. Ethics are another question entirely.

Their website says they have simplified their tariff structure to four products. None of them include a £200 credit after 12 months.

Perhaps you have to give them a nudge, wink, wink and they get one from behind the counter

bob_bank_spanker

backfoot wrote: »

Their website says they have simplified their tariff structure to four products. None of them include a £200 credit after 12 months.

I used to do the job that the people calling customers are doing - it was quite possible when I was performing that role to stick people onto standard tariff and apply a 200 pound credit, if they've rolled that out to other tariffs I can't comment.

backfoot

bob_bank_spanker wrote: »

I used to do the job that the people calling customers are doing - it was quite possible when I was performing that role to stick people onto standard tariff and apply a 200 pound credit, if they've rolled that out to other tariffs I can't comment.

Thanks bob,

So at what stage of the switch would you do this?

Would the offer be backed up in writing to confirm it if the customer cancelled the switch?

backfoot

It doesn't look like Bob feels he can reveal any further information.

I understand that these offers are made soon after the new supplier first contacts BG.

Consequently it is a Management sanctioned and controlled tactic.

I am surprised that if it is a legitimate tactic that BG via their Forum Rep do not explain their policy.

Terrylw1

bob_bank_spanker wrote: »

I believe BG are offering a new tariff with a 200 credit after 12 months - certainly this was what was offered to me (not that you will prise me off my edf fixed tariff!), if they are within their cooling off period I think this covers them legally. Ethics are another question entirely.

Ethically, there is nothing wrong will retaining a customer by beating a competitor.

Legally, this is perfectly acceptable as its not covered anywhere in the SLC's.

However, as Jalexa stated, the supplier has no idea that you are switching away until they get the notification of register by your proposed new supplier.

At this point, its been a common tactic to send out "We are sorry you are leaving, call us to discuss a better offer" letters which have been around for over 10 years to my knowledge.

However, back in those days we didn't have early termination charges. So, you could get them back. It was always known as a "Regain" or "Winback" contract.

So, are Bgas trying to "Winback" their ex customers by beating the new suppliers deal and covering the early termination charges? If so, that's fine.

Or, are they trying to retain you by blocking the switch with an objection? If so, this is a blatant breach of SLC14 and Ofgem need to publically declare an investigation.

The fact it keeps appearing shows its not individual so it must have been signed off much higher up.

Also consider the fact that creation of prices has nothing to do with sales management. Pricing teams have to determine the profitability of the tariff to create/change rates or to include a deferred payment/discount.

It would seem Bgas are trying to lock their customers in by copying Npower's strategy.

Adding credit to an account is an easy credit adjustment but its unpopular as it shows up on ledgers so finance managers prefer not to use this method since its included with all the other adjustments.

Its a quicker way than rolling out a new tariff plus it means they can still keep their minimalist tariff structure but one thing bothers me ethically...they only offer it in retention so they I believe they are penalising new business and existing loyal customers.

Isn't that a breach of SLC25A? Oh hang on, Ofgem removed that provision in July. Bgas cashing in on that?

backfoot

It's rare I disagree with Terry so I hope he accepts an alternative view.

Reacting only when customers are already switching smacks of stifling competition,not encouraging it. It is an underhand tactic designed to catch out the uninformed. It is basically mis-selling as it isn't an actual tariff but a discriminatory inducement.

If such offers did produce real benefits and were allowed the switching market may become competitive. However,I personally don't believe they are legal and properly recorded or produce real customer savings.

At best they are deferred conditional offers hidden away to save the real competitive pressures of offering favourable prices up front. If this was a valid tactic then all the suppliers would be indulging in a like for like free for all and switching would fall to all time low levels.

I have again asked Ofgem today for the third time what the rules on this area are and what their response to it is. So far no response.

Terrylw1

I guess it depends on the industry. For instance, in the mobile phone industry this has always been common but we're talking free or cost price accessories, not contractual reductions.

For energy, it can't work because it penalises existing loyal customers and new business who can't access it.

If the current supplier has introduced new tariffs that benefit the customer over the new supplier, I think if the cash payout covers the ETC, its OK. This is only because it favours the customer who has missed out on newer tariffs due to timing.

I don't think larger payments are OK because they are outside of the tariff so the detriment of them will be applied over the portfolio to recover the loss.

So, I don't disagree with you Backfoot, I think they should be used in clear scenarios and shouldn't he used as lures as that's when they become unethical in this sector. This would avoid consumer confusion tactics and continue competition.

I probably didnt explain myself properly. In terms of law, I've just gone by the SLC's and can't find anything relevant anymore.

I suggest you ask Ofgem why they removed the discrimination SLC which would cover this, the other SLC's don't seem to.