Does This Mean The End Of Cashback On Energy Products.

Ypaymore

Am I reading this right ? is cashback as such being stopped under new Ofgem Rules about cash discounts ?

"Cashback


[FONT=Verdana,Verdana][FONT=Verdana,Verdana]2.72. We received one response which outlined concerns over the implication of our rules for cashback models. The specific circumstance referred to was a cashback model that was not in the form of a direct discount, nor a bill deduction over time but a payment from the cashback companies paid directly into the customer‟s chosen bank or Paypal account. As this is a cash discount, linked to the energy supply contact, and the customer receives it as a result of taking up the supply contract, we believe that this cashback reward will still impact the customer‟s decision and is therefore not permissible under our rules.


2.73. As mentioned above, it is for suppliers to ensure that their representatives comply with these rules. "
[/FONT]

[/FONT]
https://www.ofgem.gov.uk/sites/default/files/docs/decisions/the_retail_market_review_-_implementation_of_simpler_tariff_choices_and_clearer_information.pdf

rogerblack

Sort-of.
My understanding is that this sort of declaration - 'we believe x is against the rules' - may have little official legal meaning - it just means exactly that.

If the companies believe strongly enough that it's not against the rules as written, they could continue to do this.
What would then happen would be either the rules would be changed to be unambiguous, or OFGEM would take action against one or more of the power companies involved.
If they win this, and subsequent appeals - then yes - this would certainly mean cashback sites stop paying out.

In the meantime - it's a matter if energy companies react to this statement of belief.
They may all stop paying cashback tomorrow, or none may react at all until an official decision.

Nada666

Ofgem's contempt for customers with a low consumption really does know no bounds.

daveyjp

M&S have stopped their loyalty bonus scheme due to the new rules.

Consumerist

Where cashback is offered by a comparison site, it has no implication for the suppliers licence conditions but if it is offered by the supplier it would probably infringe the licence conditions.

So it looks to me as though it depends on who offers the cashback.

MillicentBystander

Consumerist wrote: »

Where cashback is offered by a comparison site, it has no implication for the suppliers licence conditions but if it is offered by the supplier it would probably infringe the licence conditions.

So it looks to me as though it depends on who offers the cashback.

Only problem being the cash back that is offered is only offered because the switching site get an even bigger cash back from the energy company!

Consumerist

MillicentBystander wrote: »

Only problem being the cash back that is offered is only offered because the switching site get an even bigger cash back from the energy company!

This may be true but as long as the cashback is not offered to the customer by the supplier, the supplier probably hasn't breached the SLCs.

Road_Hog

Ypaymore wrote: »

Does This Mean The End Of Cashback On Energy Products

Hopefully.


Who do you think pays for the cashback?


All this switching just generates commission for the likes of Uswitch.


Who do you think pays for this in the long run?

[Deleted User]

So instead of "topcashback " sharing their switching commission with me, I m back to funding the likes of the self promoting comp site companies like Uswitch grabbing the whole lot. I hope they find a way round it by me going another route to avoid the these companies. I cant see what difference it makes to OFGEM if Uswitch collect £60 ( approx ) or "topcashback " take a smaller cut sharing it with me

Road_Hog

sacsquacco wrote: »

So instead of "topcashback " sharing their switching commission with me, I m back to funding the likes of the self promoting comp site companies like Uswitch grabbing the whole lot. I hope they find a way round it by me going another route to avoid the these companies. I cant see what difference it makes to OFGEM if Uswitch collect £60 ( approx ) or "topcashback " take a smaller cut sharing it with me

How about, we don't pay any company commission and save the money?


Who do you think pays the switching deal money?

penrhyn

An excellent idea with one snag, it would kill off the Money Saving Expert site.
...Cos it earns its money through commission, which is why it was snapped up by MoneySupermarket for £87,000,000.00.