OFGEM Press Release

RedJim

http://www.ofgem.gov.uk/Media/PressRel/Documents1/Ofgem35.pdf

I don't normally post on the MSE boards, but having read this after stumbling across it at work earlier today I thought it might be worth posting.

"In its review of the licence conditions that govern the supply companies, Ofgem has axed the 28-day rule that allows customers to switch supplier only four weeks after signing up with another. This has made it difficult for suppliers to offer long-term deals that include installation of energy-saving measures. Ending the 28-day rule is one element of a wide-ranging project... It comes into force today (Wednesday)..."

As a fully-certified cynic, I'm doubtful as to whether scrapping the 28-day rule is really going to do the consumers much good. Facilitating energy-saving measures is all well and good, but in my mind this is carte blanche for the energy companies to lock everyone into long-term contracts? I'm no expert and I'd be interested to see what people in the know make of this.

michaels

Motley fool had a piece on this, there take was welcome to complex mobile phone / broadband type deals where it becomes much harder to compare different 'packages' and you are locked in if prices rise / don't fall.

I think they are probably correct and that the regulator has been hoodwinked by the supply companies - I think they played the 'green' card to acheive this slight of hand. I would bet that average annual payments are higher than they would otherwise have been.

EdInvestor

http://www.thisismoney.co.uk/consumer/bills/article.html?in_article_id=422983&in_page_id=510&ct=5


People are not happy.

Cardew

Welcome to the forum; and well spotted.

I believe cynicism in the energy market is normally well justified; however I am not sure that this announcement warrants such suspicion.

I believe this is a reaction to the growth industry of comparison websites that actively encourage frequent hopping between utility companies for the sole purpose of maximising their commission.

They lure the gullible with initially low Direct Debit payments that are totally unrealistic, and inducements of free champagne and cashback. Perusal of this site will show what a huge incentive the latter is to many people.

These parasitic organisations in the long term do not benefit customers.
Their commission and the considerable extra expenses incurred by the companies in continually setting up new accounts are eventually borne by us the consumer.

The regulator has sufficient ‘teeth’ to prevent Utility companies offering ‘great deals which 'lock in' customers, and then upping prices.

My hope is that it will bring some much needed stability to the gas/electricity market.

Cardew

EdInvestor wrote: »

http://www.thisismoney.co.uk/consumer/bills/article.html?in_article_id=422983&in_page_id=510&ct=5


People are not happy.

I quite like 'This is money' however they are hardly unbiassed as they encourage switching through their site and doubtless derive considerable revenue from people switching.