Does This Mean The End Of Cashback On Energy Products.

Consumerist

Reading the OP more carefully and assuming it is extracted from one of the Ofgem consultation or decision documents, I reckon the OP is absolutely right.

[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.

This looks like a decision by Ofgem based on it's belief that cashbacks "[/FONT][/FONT][FONT=Verdana,Verdana][FONT=Verdana,Verdana][FONT=Verdana,Verdana][FONT=Verdana,Verdana]will still impact the customer's decision".

So, even switching sites will not be allowed to offer cashbacks.
[/FONT][/FONT][/FONT][/FONT]

wakeupalarm

The whole switching industry and its associated costs is built on cash back. End the cash back and you wipe out the switching sites. Why bother using a switching site when you can just go to the company direct. It just adds to the costs of energy that we all pay for.

If there was an end to cash backs the switching sites would be in uproar launching campaigns all over the place, Martin would be on TV 24/7, but we have heard nothing from them.

Perhaps, someone should let them know that their industry is about to cease to exist and all their employees will be out of a job. Ofgem often bleat on about not having the powers to intervene but he they are closing an entire industry down with the loss of thousands of jobs and not a peep from those effected.

It's not going to happen!

Cardew

Consumerist wrote: »

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.

I hope that your interpretation is incorrect!


Surely if a company is forbidden by the regulations to give cashback, they cannot simply pay a third party to circumvent those regulations.


Several of us have argued for years that the various comparison websites are a parasitic overhead that the customers pay in increased charges.


It would be very easy for the Government funded Energy Saving Trust(or even Ofgem) to set up a comparison website for gas and electricity.

MillicentBystander

Wholeheartedly agree with Cardew :eek::D The rsie of the comparison sites and their multi million pound turnover is just yet another indication of an industry that is needlessly and almost criminally over-complicated. Yes, I used to take full advantage of the cash back when I was a tariff tart so I don't criticise Martin for getting in on the action but it really does add a further layer of wholly avoidable costs to customers' bills. And it would be soooo easy for any Govt genuinely looking for genuine savings on their electorate's bills to simply have one Govt sponsored, entirely free (to company and customer alike) comparison site.

Consumerist

Cardew wrote: »

I hope that your interpretation is incorrect!

Looking again at the OP, it would seem that I was probably wrong on that point.

It would be very easy for the Government funded Energy Saving Trust(or even Ofgem) to set up a comparison website for gas and electricity.

Consumer Focus used to provide a comparison facility but it's not clear, at the moment, who, if anyone, will take over that role. Last I heard, Ofgem had declined to do it.

wakeupalarm

Cardew wrote: »

Several of us have argued for years that the various comparison websites are a parasitic overhead that the customers pay in increased charges.

It would be very easy for the Government funded Energy Saving Trust(or even Ofgem) to set up a comparison website for gas and electricity.

Very true and in fact isn't this how it worked initially after competition was introduced before the switching sites got in on the act.

I remember Which? on behalf of Ofgem producing quarterly list of tariffs, (the type that so many poster frequently request on here)

Consumerist

Cardew wrote: »

Several of us have argued for years that the various comparison websites are a parasitic overhead that the customers pay in increased charges.

Ofgem has always seen a continuing role for comparison sites so that aspect is not likely to change, unfortunately. What will change, it would seem, is that customers will no longer get a slice of the action.

Consumerist

There is an article on the <The Drum website> which may be of some interest regarding the current situation.

[Deleted User]

Actually I can see the point now of Ofgems rule as I could possibly collect 4 x £42 by doing 4x dual fuel switches a year. Topcashback require a 3 month stay with any supplier for their £42.. It would incite switching for switchings sake, so I agree that something has got to be done to avoid that.

Consumerist

sacsquacco wrote: »

Actually I can see the point now of Ofgems rule as I could possibly collect 4 x £42 by doing 4x dual fuel switches a year. Topcashback require a 3 month stay with any supplier for their £42.. It would incite switching for switchings sake, so I agree that something has got to be done to avoid that.

Frankly, I wouldn't see anything wrong with switching 4 times a year if that is what price-competition generates.

Currently the name of the game is for the energy suppliers to see how much they can screw their customers for and get away with it.

They didn't hire Angela Knight for nothing, you know.