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  • FIRST POST
    • MSE Guy
    • By MSE Guy 24th Sep 10, 3:03 PM
    • 1,628Posts
    • 1,255Thanks
    MSE Guy
    MSE News: The easy way to navigate the energy market maze
    • #1
    • 24th Sep 10, 3:03 PM
    MSE News: The easy way to navigate the energy market maze 24th Sep 10 at 3:03 PM
    This is the discussion thread for the following MSE News Story:

    "There's much talk today about the 'confusing' energy market but those languishing on hugely expensive tariffs can take much of the pain out of switching by using a comparison site ..."

Page 1
  • oakhouse13
    • #2
    • 24th Sep 10, 3:19 PM
    • #2
    • 24th Sep 10, 3:19 PM
    Price comparsion sites do not make prices more transparent. They make prices more opaque because they all have their own deals that are the most important thing for them - making sure they switch you and not some other comparison site.

    I switched using a Consumer Focus comparison website. Top of the table for my quote were nPower and Scottish Power but only because discounts for direct debit that were out of all proportion to the actual saving of paying this way were taken out of the annual cost for these tariffs in the tables even though the discount is not paid until after 12 months and then only if you have met all the conditions.

    What this means is that someone very stretched financially will sign up for one of these tariffs since it appears at the top of the table, circumstances may change some time during the following twelve months, they will fall by the wayside with direct debits and loose their entire three figure discount altogether and end up paying more than if they had chosen a tariff with less risk.

    Now the tariff I signed up for is no longer current, when I do a comparison on a Consumer Focus comparison table, I am shown my annual spend without the direct debit discount taken off so by showing what I am paying inflated they can suggest I switch again and earn another commission.

    Transparent bills please Ofgem and get rid of all these middlemen - we should be able to read our own energy bills and compare for ourselves. Comparison sites are not going to delivery that.
    Last edited by oakhouse13; 24-09-2010 at 4:33 PM. Reason: Error
  • Plushchris
    • #3
    • 24th Sep 10, 4:53 PM
    • #3
    • 24th Sep 10, 4:53 PM
    I switched using a Consumer Focus comparison website. Top of the table for my quote were nPower and Scottish Power but only because discounts for direct debit that were out of all proportion to the actual saving of paying this way were taken out of the annual cost for these tariffs in the tables even though the discount is not paid until after 12 months and then only if you have met all the conditions.
    Originally posted by oakhouse13
    So you didnt read the information on the website you were using that tells you all about the discounts being paid at the end of the year?

    What this means is that someone very stretched financially will sign up for one of these tariffs since it appears at the top of the table, circumstances may change some time during the following twelve months, they will fall by the wayside with direct debits and loose their entire three figure discount altogether and end up paying more than if they had chosen a tariff with less risk.
    Originally posted by oakhouse13
    Can the comparison sites be held accountable for people not paying their direct debits and therefore losing their discounts?

    Now the tariff I signed up for is no longer current, when I do a comparison on a Consumer Focus comparison table, I am shown my annual spend without the direct debit discount taken off so by showing what I am paying inflated they can suggest I switch again and earn another commission.
    Originally posted by oakhouse13
    Which tariff are you on and what website are you using?
    Missing Tesco R&R since Feb '07 & now a "Tesco veteran" apparently!
  • oakhouse13
    • #4
    • 24th Sep 10, 5:41 PM
    • #4
    • 24th Sep 10, 5:41 PM
    "So you didnt read the information on the website you were using that tells you all about the discounts being paid at the end of the year?"

    I did, I found it where it was hidden but I'm not thinking about myself, if you can understand such a concept. I'll most likely not have problems meeting a direct debit payment for 12 months plus.

    I was thinking about the person that signs up for what was advertised as the cheapest tariff, the tariff that appeared at the top of the sales device that is a comparison table. They then through no fault of their own, fail a direct debit payment, say 10 months in. They loose well over £100 plus are charged probably by their bank, and are switched to an expensive tariff.

    What I would consider as a customer who should be on as low as possible a tariff - lower than me for example - will actually be on a more expensive tariff and the comparison site walks off with the commission.

    Comparison sites add to lack of transparent prices which according to well established economic theory:

    "contributes to price discrimination, which can cause different customers to pay higher prices, an outcome that may be acceptable in some markets but may lead to undesirable consequences in others. For example, if the customers with the least bargaining power also tend to be those with the least ability to pay, such discrimination may be deemed particularly undesirable."
  • KimYeovil
    • #5
    • 24th Sep 10, 6:29 PM
    • #5
    • 24th Sep 10, 6:29 PM
    They then through no fault of their own, fail a direct debit payment, say 10 months in. They loose well over £100 plus are charged probably by their bank, and are switched to an expensive tariff.
    Originally posted by oakhouse13
    This simply pretty much never happens through no fault of theirs.
  • Plushchris
    • #6
    • 24th Sep 10, 6:54 PM
    • #6
    • 24th Sep 10, 6:54 PM
    "So you didnt read the information on the website you were using that tells you all about the discounts being paid at the end of the year?"

    I did, I found it where it was hidden but I'm not thinking about myself, if you can understand such a concept. I'll most likely not have problems meeting a direct debit payment for 12 months plus.

    I was thinking about the person that signs up for what was advertised as the cheapest tariff, the tariff that appeared at the top of the sales device that is a comparison table. They then through no fault of their own, fail a direct debit payment, say 10 months in. They loose well over £100 plus are charged probably by their bank, and are switched to an expensive tariff.

    What I would consider as a customer who should be on as low as possible a tariff - lower than me for example - will actually be on a more expensive tariff and the comparison site walks off with the commission.

    Comparison sites add to lack of transparent prices which according to well established economic theory:

    "contributes to price discrimination, which can cause different customers to pay higher prices, an outcome that may be acceptable in some markets but may lead to undesirable consequences in others. For example, if the customers with the least bargaining power also tend to be those with the least ability to pay, such discrimination may be deemed particularly undesirable."
    Originally posted by oakhouse13

    Where was it "hidden"?

    Under the button that says "More info" by any chance? Hardly hidden when the website tells you where it is..

    Dont get me wrong, I think the way companies pricing structures is out of control and the useless regulator does nothing about it.

    But the comparison sites are not the enemy here, they are accurate when you put the right information in (and look at the information displayed on them)

    Also, What tariff are you on and what website were you using??
    Missing Tesco R&R since Feb '07 & now a "Tesco veteran" apparently!
  • oakhouse13
    • #7
    • 24th Sep 10, 8:25 PM
    • #7
    • 24th Sep 10, 8:25 PM
    This simply pretty much never happens through no fault of theirs.
    Originally posted by KimYeovil
    I don't know but according to Martin Lewis who has years of experience, it is change of circumstance that causes financial problems.

    If you have 5 minutes, Lewis on what causes debt; the solicitor is not me:

    http://www.gm.tv/videos/?vxClipId=1441_gmtv_9557

    I don't see any reason to disagree, he has dealt with very many consumers in debt.

    What I'm saying is that it is very difficult for people to know a year in advance if they will be able to meet a direct debit payment in order to receive a bonus offered at the time of signing up.

    The energy companies will know and they can increase the discount for direct debit payment artificially knowing what percentage they will actually pay out on. Discounts are marketing when they should be reducing prices for the most needy. Old people on high energy prices will cut back on the heat they use this winter to the point of dying.

    The comparison sites could go for clarity, reduce risk for customers and not put discounts dependent on consumer behaviour in their table calculations but that would harm their commercial interests and they are paid for transferring risk to consumers.

    Lewis does a marvellous job but comparison businesses are not the answer, they are part of the problem of opaque prices.
  • Plushchris
    • #8
    • 24th Sep 10, 9:06 PM
    • #8
    • 24th Sep 10, 9:06 PM

    What I'm saying is that it is very difficult for people to know a year in advance if they will be able to meet a direct debit payment in order to receive a bonus offered at the time of signing up.
    Originally posted by oakhouse13

    But you expect the comparison sites to assume that everyone wont be able to meet the direct debits and so not include those discounts in the predicted savings?

    Any comparison site that is consumer focus accredited is bound by the consumer focus code of conduct. It is consumer focus that tells the comparison sites what they can and cant include..

    If you select to pay quarterly most comparison services wont include prompt payment discounts (how do they know if you are going to pay promptly?) but if you willingly sign up to direct debit tariff then why shouldnt they assume that you are going to continue to pay by direct debit?

    All the websites list the discounts associated with direct debits as "Direct debit discounts" (the clue is in the name) if people fail to pay by direct debit at any time then they will lose that discount, I have seen this mentioned on every comparison site I have used (and I would never class that information as "hidden")

    If people cant be bothered to look at what they are signing up to when all the facts are there to look at and NOT hidden then thats hardly the fault of the site is it?

    I simply dont understand how comparison sites ADD to the problem..

    They cant make comparing prices much simpler, when was the last time you worked out what your usage would cost on around 70 different tariffs available from around a dozen suppliers with a notebook and pen, it would take you all day, I can put my usage into a website and get the answers as to who is cheapest with a few clicks..



    Also, I'll go for third time lucky on this..

    What tariff are you on and what website were you using?
    Missing Tesco R&R since Feb '07 & now a "Tesco veteran" apparently!
    • Ken68
    • By Ken68 25th Sep 10, 7:19 AM
    • 6,497 Posts
    • 4,138 Thanks
    Ken68
    • #9
    • 25th Sep 10, 7:19 AM
    • #9
    • 25th Sep 10, 7:19 AM
    The suppliers recover the comparison site costs by putting up prices, so in effect the customer is paying to have the tariff explained more simply.
    All the more reason to maximise home insulation and to maximise cashback.
  • KimYeovil
    I don't know but according to Martin Lewis who has years of experience, it is change of circumstance that causes financial problems.

    If you have 5 minutes, Lewis on what causes debt; the solicitor is not me:

    http://www.gm.tv/videos/?vxClipId=1441_gmtv_9557

    I don't see any reason to disagree, he has dealt with very many consumers in debt.

    What I'm saying is that it is very difficult for people to know a year in advance if they will be able to meet a direct debit payment in order to receive a bonus offered at the time of signing up.
    Originally posted by oakhouse13
    Irrelevant nonsense! If you are on a direct debit you are paying in advance - you are always in credit. If you lose your job or circumstances change then you know in advance - you adjust your subsequent useage to suit your new income.
    • AMO
    • By AMO 25th Sep 10, 9:31 PM
    • 1,442 Posts
    • 374 Thanks
    AMO
    Yeah, I agree that price comparison websites are in it for themselves. You won't see Utility Warehouse being offered for example even though they come cheapest in many situations simply because they don't pay commission. Same with car insurance really - you won't get Direct Line popping up. These price comparison websites get a lot of money when they switch you. Much like pension advisors that like switching people with large pots because they make percentage commission on the newly bought units - churning is very profitable for them.
    • geordie joe
    • By geordie joe 25th Sep 10, 10:39 PM
    • 8,399 Posts
    • 8,454 Thanks
    geordie joe

    But the comparison sites are not the enemy here, they are accurate when you put the right information in (and look at the information displayed on them)
    Originally posted by Plushchris

    I have used many comparison sites many times, and no matter what figures I enter they all come with npower are the cheapest. Is it a coincidence that npower pay the most commission?

    I have also worked out the figures for myself and found the comparison sites are actually wrong.

    Another point, last year I entered random figures into a comparison site. It said I could save around £100 per year if I switched to npower for both. But when I checked the figures I found that I would save £200 on my electricity bill switching to npower, but would pay £100 more on my gas.

    Unfortunately the figures I used were much higher than my real figures. But then point is, if the figures were real and I had followed the comparison site I would have saved £100 per year by switching both. But by doing my own calculations I could just switch the electricity and save £200 per year.

    The reason the comparison site didn't tell me that was it makes double the commission if you switch both.

    Another example. I got my gas bill today £68.33, several comparison sites have told me the best option is to switch to npower and I'll save 10 to 15 quid. The ebico web sites says I would have only paid £27 if I'd been with them?

    Which is no surprise to me, because I switched to Ebico 6 months ago. But I was already with southern electric, and even though ebico told me I had been switched, southern electric have said I didn't switch to ebico, I just switched my tariff with them to an Argos Online tariff.

    According to my bill they charged me £22 for the gas I used, and the rest was the standing charge. Ebico would have only charged me £27 so I'm switching. I don't care if "Southern Electric don't like you switching to Ebico", I'll switch to someone else then switch to ebico.

    Sorry for the rant, but I didn't switch tariffs, I switched supplier. And I didn't get a letter telling me I had switched tariffs not supplier, and I didn't get a letter with an Argos card in it (I would have noticed, and read it).
  • Poosmate
    Irrelevant nonsense! If you are on a direct debit you are paying in advance - you are always in credit. If you lose your job or circumstances change then you know in advance - you adjust your subsequent useage to suit your new income.
    Originally posted by KimYeovil

    It's not irrelevant nonsense. I would love to know how many people would be able to continue all of their obligations in full if they were to turn up for work on Monday only to find the doors locked and hear on the news that their company had gone bust. Not everybody receives notice of redundancy and not everyone is entitled to redundancy pay. I believe this is what Oakhouse was referring to.

    Poo
    One of Mike's Mob, Street Found Money £1.66, Non Sealed Pot (5p,2p,1p)£6.82? (£0 banked), Online Opinions 5/50pts, Piggy points 15, Ipsos 3930pts (£25+), Valued Opinions £12.85, MutualPoints 1786, Slicethepie £0.12, Toluna 7870pts, DFD Computer says NO!
  • Plushchris
    I have used many comparison sites many times, and no matter what figures I enter they all come with npower are the cheapest. Is it a coincidence that npower pay the most commission?
    Originally posted by geordie joe
    Have you got any evidence that Npower pay the most comission? A link would be nice.

    I have also worked out the figures for myself and found the comparison sites are actually wrong.

    Another point, last year I entered random figures into a comparison site. It said I could save around £100 per year if I switched to npower for both. But when I checked the figures I found that I would save £200 on my electricity bill switching to npower, but would pay £100 more on my gas.
    Originally posted by geordie joe
    So you didnt bother checking on the comparison site if it would be cheaper to just switch one fuel? All the comparison sites I've used have this feature.
    And how was the comparison wrong? You would still save £100 would you not?

    Unfortunately the figures I used were much higher than my real figures. But then point is, if the figures were real and I had followed the comparison site I would have saved £100 per year by switching both. But by doing my own calculations I could just switch the electricity and save £200 per year.
    Originally posted by geordie joe
    By using the comparison site properly you could have done the same thing and not gone to the effort of working it out yourself.

    The reason the comparison site didn't tell me that was it makes double the commission if you switch both.
    Originally posted by geordie joe
    Again, I'd be very interested in your evidence for this, I'm sure there would be lots of others on this site interested in seeing the the comission breakdown the sites get, you seem to know a lot about it, please share!

    Another example. I got my gas bill today £68.33, several comparison sites have told me the best option is to switch to npower and I'll save 10 to 15 quid. The ebico web sites says I would have only paid £27 if I'd been with them?
    Originally posted by geordie joe
    Comparison websites work on annual figures, putting a quarterly bill into any of them will give you a wrong comparison.

    Many many people have posted on here saying the comparison websites are incorrect and to my knowledge none have been able to prove that when asked for the figures they were using so if you can provide all the figures you were using then we would be able to see if the website you were using was indeed incorrect..

    It usually boils down to one thing, the comparison websites are only as good as the person using them, you put crap in, you'll get crap out.
    Missing Tesco R&R since Feb '07 & now a "Tesco veteran" apparently!
  • Plushchris
    Yeah, I agree that price comparison websites are in it for themselves. You won't see Utility Warehouse being offered for example even though they come cheapest in many situations simply because they don't pay commission. Same with car insurance really - you won't get Direct Line popping up. These price comparison websites get a lot of money when they switch you. Much like pension advisors that like switching people with large pots because they make percentage commission on the newly bought units - churning is very profitable for them.
    Originally posted by AMO
    Utility Warehouse is on all of the comparison sites I've used so not sure why you dont see them?

    Maybe its because you dont scroll right down to the bottom of the results table, they are usually in the last quarter of the results as in actual fact they are one of the most expensive suppliers in most cases.
    Missing Tesco R&R since Feb '07 & now a "Tesco veteran" apparently!
    • Cardew
    • By Cardew 26th Sep 10, 8:21 AM
    • 27,830 Posts
    • 13,697 Thanks
    Cardew
    Yeah, I agree that price comparison websites are in it for themselves. You won't see Utility Warehouse being offered for example even though they come cheapest in many situations simply because they don't pay commission. Same with car insurance really - you won't get Direct Line popping up. These price comparison websites get a lot of money when they switch you. Much like pension advisors that like switching people with large pots because they make percentage commission on the newly bought units - churning is very profitable for them.
    Originally posted by AMO
    Without doubt the comparison website are there to encourage people to switch, and hence increase their commission.

    However perhaps you can give an example of a comparison website that doesn't show Utility Warehouse? As far as I am aware they all include that supplier. However as they are without doubt just about the most expensive Gas and Electricity supplier in UK, they are always very near the bottom of all lists.
  • oakhouse13
    http://www.affiliates4u.com/forums/commission-junction/73757-calling-all-simply-switch-affiliates-want-earn-14-energy-application.html

    This is how the switching companies talk to their affiliates all the time - they pay bonuses for meeting targets so affiliates of affiliates refer through them rather than any other switching site.

    Just far too many layers of sales each adding complexity and taking commission that should be going into lower prices that everyone pays.

    The reference to lets spin the news so it is all about switching makes me absolutely mad. They're not interested in what should be news that is best for the country i.e. cutting your consumption.

    I will dig out the screen grabs of the tariffs I complained about earlier. I think they are a good demonstration that comparison sites and utlity companies:

    "contribute to price discrimination, which can cause different customers to pay higher prices, an outcome that may be acceptable in some markets but may lead to undesirable consequences in others. For example, if the customers with the least bargaining power also tend to be those with the least ability to pay, such discrimination may be deemed particularly undesirable."

    This is not any consumer product, it is life saving. The tariff I took out, I can see how some people will have taken it out at the same time as me as the cheapest tariff but through no fault of their own it will be the most expensive while consumers like me in a strong bargaining position will get the lowest price.
    • Cardew
    • By Cardew 26th Sep 10, 10:49 AM
    • 27,830 Posts
    • 13,697 Thanks
    Cardew
    http://www.affiliates4u.com/forums/commission-junction/73757-calling-all-simply-switch-affiliates-want-earn-14-energy-application.html

    This is how the switching companies talk to their affiliates all the time - they pay bonuses for meeting targets so affiliates of affiliates refer through them rather than any other switching site.

    Just far too many layers of sales each adding complexity and taking commission that should be going into lower prices that everyone pays.

    The reference to lets spin the news so it is all about switching makes me absolutely mad. They're not interested in what should be news that is best for the country i.e. cutting your consumption.

    I will dig out the screen grabs of the tariffs I complained about earlier. I think they are a good demonstration that comparison sites and utlity companies:

    "contribute to price discrimination, which can cause different customers to pay higher prices, an outcome that may be acceptable in some markets but may lead to undesirable consequences in others. For example, if the customers with the least bargaining power also tend to be those with the least ability to pay, such discrimination may be deemed particularly undesirable."

    This is not any consumer product, it is life saving. The tariff I took out, I can see how some people will have taken it out at the same time as me as the cheapest tariff but through no fault of their own it will be the most expensive while consumers like me in a strong bargaining position will get the lowest price.
    Originally posted by oakhouse13
    Yet again we have someone defining a problem(the easy part) but not proposing a solution(the difficult part!)

    Of course Comparison Websites make their money by people switching through them.

    MSE is financed by referrals as Martin freely admits - this site shows the links that make MSE money and those that don't.

    Comparison websites, Quidco etc - (even MSE) are parasitic in that the £millions they are paid is reflected in the higher prices we all pay for our gas and electricity.

    That said, such is the complexity of the tariffs on offer, the comparison networks offer an easy way to compare prices and conditions of the many combinations of tariffs.

    Surely if a company offer a discount for payment by DD, nobody should commit to payment by that method if they consider their ability to pay by DD is likely to be compromised?

    So I can't really understand what solution you are proposing?
  • Plushchris

    The reference to lets spin the news so it is all about switching makes me absolutely mad. They're not interested in what should be news that is best for the country i.e. cutting your consumption.
    Originally posted by oakhouse13

    Where does it say "lets spin the news" in that article?
    Missing Tesco R&R since Feb '07 & now a "Tesco veteran" apparently!
  • oakhouse13
    The solution I am proposing is much simpler, transparent prices that are no so complicated almost all consumers either do not have the time or are not mathematically minded enough to understand so they have to rely on a complex financial calculation deon by a comparison site that has a vested interest.

    This would bring far more consumers into the marketplace, far more than at the moment because I believe that most people are like me and do not trust a salesman whether that sales person is a comparison table or an introductory offer or knocking on your door.

    Lewis makes money from information by chance when that information results in a sale. He is not a salesman. I admit, I am very biased against sales & marketing and I would guess you both work in sales. When I read that £90 was on offer for referring just five consumers to switch and old people economise on fuel because it is too expensive, I object and want to change that.
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