Loyalty to energy company costs

sky111

£186 Lazy tax for people who forget to switch supplier




http://www.telegraph.co.uk/finance/personalfinance/energy-bills/11888930/Energy-firms-impose-186-lazy-tax-for-people-who-forget-to-switch.html#disqus_thread


Energy firms can only afford to offer cheaper tariffs "if a proportion of customers revert to the more expensive 'standard variable' rate."

DigForVictory

I've no intention of being loyal but I'm looking at an £800+ bill to move! Which on DD has me bemused & thoroughly hacked off.

Nada666

DigForVictory wrote: »

I've no intention of being loyal but I'm looking at an £800+ bill to move! Which on DD has me bemused & thoroughly hacked off.

No-one to blame but yourself. You cannot accidentally use an extra £800 of energy. You knew you were using more than you were paying for. You were free at any time to accommodate that difference and choose how and when to pay it.

cifpower

Its not a tax. Why people shop around for car & home insurance or broadband but not gas & electricity is something I will never understand.

System

That's the most disingenuis and inaccurately titled article that I have read in a long while. Energy companies are NOT allowed to roll customers on to another fixed price contract unless they have obtained the customer's permission to do so. As energy companies have an obligation to inform customers that a fixed tariff is coming to an end, I am not sure what more energy companies can do.

That said, energy companies could do more to inform their customers that a monthly DD payment is not an 'all you can eat' energy payment. Even the big companies are guilty of using the words Fixed Monthly Payment when nothing could be further from the truth.

naedanger

Hengus wrote: »

That's the most disingenuis and inaccurately titled article that I have read in a long while. Energy companies are NOT allowed to roll customers on to another fixed price contract unless they have obtained the customer's permission to do so. As energy companies have an obligation to inform customers that a fixed tariff is coming to an end, I am not sure what more energy companies can do.

The article seemed reasonably fair to me, although not perfect. It did explain that the root problem was with customers being "lazy" and that if suppliers were forced to introduce more equal prices it could push up costs for all customers according to the CMA.

However I think the article should have said a bit more about the comparison between the standard variable vs fixed tariffs. (If customers could, at any future time, move from the fixed term tariff to standard tariffs without penalty then I think the article should have said so, as then the complaint would have had more validity. However if the standard variable terms offer more flexibility (e.g. because of potential early termination charges) than all alternative cheaper tariffs then they should point out that for some people the standard terms would be the more suitable option.)

That said, energy companies could do more to inform their customers that a monthly DD payment is not an 'all you can eat' energy payment. Even the big companies are guilty of using the words Fixed Monthly Payment when nothing could be further from the truth.

Agreed. I could see the point not crossing the mind of some people but there are enough watchdogs to point out that some customers are confused by the terminology.