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  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 7th Dec 12, 4:11 PM
    • 2,324Posts
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    Former MSE Helen
    MSE News: Eon to raise energy prices
    • #1
    • 7th Dec 12, 4:11 PM
    MSE News: Eon to raise energy prices 7th Dec 12 at 4:11 PM
    "The gas and electricity rise on 18 January will come just 18 days after a promise to freeze prices ends..."

    Read the full story:

    Eon to raise energy prices

Page 1
  • Wywth
    • #2
    • 10th Dec 12, 10:49 AM
    • #2
    • 10th Dec 12, 10:49 AM
    "The gas and electricity rise on 18 January will come just 18 days after a promise to freeze prices ends..."


    We're calling for tougher regulation so firms stop this devious marketing, which lures consumers in, only to be hit by hikes soon after.
    Can I call for an end to the sensationalist, tabloid drivel, the once respected MSE news items increasingly appear to include, please?

    Eon have only ever said they would not increase prices for their variable tariff customers this year. They have never suggested they won't be increasing prices next year, and January is next year!

    In fact this was asked a couple of months ago when Martin asked Eon the question on Radio 5 Live
    http://blog.moneysavingexpert.com/2012/10/08/when-will-eon-raise-prices/

    Eon said then ""No, were promising not to raise prices this year." and refused to wager with Martin about any changes next year.

    If customers wanted the security of a fixed tariff, then they should ask for a fixed tariff.
    If customers want to take the rough with the smooth and gamble on a variable tariff, then there are rules that say how much notice a supplier must give to change prices... and E.on are fully complying with those rules.

    I don't see how promising something extra (i.e. not to raise prices this year, a good 3 months ago) is anything that can be described as devious; in fact quite the contrary when all the other big 6 have put their prices up over these months.

    Edit: In fact it appears E.on first made this promise way back in May 2012
    http://www.bbc.co.uk/news/business-18058557
    So that's been 9 months they have held their variable tariffs for!
    Last edited by Wywth; 10-12-2012 at 10:56 AM.
    • Consumerist
    • By Consumerist 10th Dec 12, 11:02 AM
    • 5,231 Posts
    • 2,611 Thanks
    Consumerist
    • #3
    • 10th Dec 12, 11:02 AM
    • #3
    • 10th Dec 12, 11:02 AM
    Can I call for an end to the sensationalist, tabloid drivel, the once respected MSE news items increasingly appear to include, please?
    Originally posted by Wywth
    Couldn't agree more.

    Rational reaction is becoming a scarce commodity from the editorial team on this site these days.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • Kushan
    • By Kushan 10th Dec 12, 11:42 AM
    • 70 Posts
    • 44 Thanks
    Kushan
    • #4
    • 10th Dec 12, 11:42 AM
    • #4
    • 10th Dec 12, 11:42 AM
    Can I call for an end to the sensationalist, tabloid drivel, the once respected MSE news items increasingly appear to include, please?

    Eon have only ever said they would not increase prices for their variable tariff customers this year. They have never suggested they won't be increasing prices next year, and January is next year!

    In fact this was asked a couple of months ago when Martin asked Eon the question on Radio 5 Live
    http://blog.moneysavingexpert.com/2012/10/08/when-will-eon-raise-prices/

    Eon said then ""No, were promising not to raise prices this year." and refused to wager with Martin about any changes next year.

    If customers wanted the security of a fixed tariff, then they should ask for a fixed tariff.
    If customers want to take the rough with the smooth and gamble on a variable tariff, then there are rules that say how much notice a supplier must give to change prices... and E.on are fully complying with those rules.

    I don't see how promising something extra (i.e. not to raise prices this year, a good 3 months ago) is anything that can be described as devious; in fact quite the contrary when all the other big 6 have put their prices up over these months.

    Edit: In fact it appears E.on first made this promise way back in May 2012
    http://www.bbc.co.uk/news/business-18058557
    So that's been 9 months they have held their variable tariffs for!
    Originally posted by Wywth
    I very much second this. I love MSE, I love that they will stand for consumer rights, but I don't think e-on is in the wrong here. They promised not to raise prices in 2012 and they haven't - what's the issue?
    If anything, we should be applauding them for making such a promise and sticking to it.
    • SnowMan
    • By SnowMan 10th Dec 12, 11:51 AM
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    SnowMan
    • #5
    • 10th Dec 12, 11:51 AM
    • #5
    • 10th Dec 12, 11:51 AM
    The point that the article is making is that EON have been promoting their price guarantee over the past few months.

    However anyone switching in the past few months won't be switched to EON's tarriff until around January (because of the 6 weekish switch period) and so won't benefit from the guarantee in any way. So is it right to promote the price guarantee to potential new customers who can never benefit from it?

    I haven't been paying attention to know if EON have been promoting the guarantee heavily in the past few months, but if they have, then MSE make a fair point.
    I came, I saw, I melted
  • exPC
    • #6
    • 10th Dec 12, 12:01 PM
    You pay for more than gas & electricity with E.ON!
    • #6
    • 10th Dec 12, 12:01 PM
    I worked with E.ON as an energy sales representative (dubbed their "Home Energy Consultant") in 2008.
    I can confirm, and customers should understand, these points:
    1) Customers pay for gas and electricity with E.ON.
    2) Customers also pay for EVERY representative's / manager's company provided new liveried car.
    3) Customers pay for the fuel used for those cars - the rep buys it to refuel, then claims it back through the company as expenses (E.ON don't pay from their own pockets, it comes from YOUR fuel bills)
    4) Contrary to popular belief, the reps don't just get a very nice salary (thank you) each month to go with their FREE, fully expensed, brand new car.
    5) E.ON reps also get a rising commission / bonus rate for sales paid by the company each month based on "number of customers captured" - the normal "expected income level" stated by E.ON is 35,000 - 38,000 in the first year, if you don't hit that target you are "coached" to raise your conversion rate.
    I personally met one established "Home Energy Consultant" (just a sales person, not a manager) in 2008 who showed evidence his annual income from E.ON was almost 98,000 for that year!!
    LITTLE WONDER THEN THAT CUSTOMERS ARE BEING MADE TO PAY MORE AND MORE FOR BASIC SERVICES OF HEAT AND LIGHT. MAYBE THE COMPANY SHOULD GET RID OF THE HUNDREDS OF CARS GIVEN AS FREEBIES TO THEIR SALES STAFF, MANAGERS, ETC., AND LOOK AFTER ITS CUSTOMERS INSTEAD.
    • Bark01
    • By Bark01 10th Dec 12, 12:17 PM
    • 793 Posts
    • 255 Thanks
    Bark01
    • #7
    • 10th Dec 12, 12:17 PM
    • #7
    • 10th Dec 12, 12:17 PM
    I worked with E.ON as an energy sales representative (dubbed their "Home Energy Consultant") in 2008.
    I can confirm, and customers should understand, these points:
    1) Customers pay for gas and electricity with E.ON.
    2) Customers also pay for EVERY representative's / manager's company provided new liveried car.
    3) Customers pay for the fuel used for those cars - the rep buys it to refuel, then claims it back through the company as expenses (E.ON don't pay from their own pockets, it comes from YOUR fuel bills)
    4) Contrary to popular belief, the reps don't just get a very nice salary (thank you) each month to go with their FREE, fully expensed, brand new car.
    5) E.ON reps also get a rising commission / bonus rate for sales paid by the company each month based on "number of customers captured" - the normal "expected income level" stated by E.ON is 35,000 - 38,000 in the first year, if you don't hit that target you are "coached" to raise your conversion rate.
    I personally met one established "Home Energy Consultant" (just a sales person, not a manager) in 2008 who showed evidence his annual income from E.ON was almost 98,000 for that year!!
    LITTLE WONDER THEN THAT CUSTOMERS ARE BEING MADE TO PAY MORE AND MORE FOR BASIC SERVICES OF HEAT AND LIGHT. MAYBE THE COMPANY SHOULD GET RID OF THE HUNDREDS OF CARS GIVEN AS FREEBIES TO THEIR SALES STAFF, MANAGERS, ETC., AND LOOK AFTER ITS CUSTOMERS INSTEAD.
    Originally posted by exPC
    So what? most of the other companies don't use filed sales and their costs are rising

    In other news E.on have reduced Operating costs by 5% of total bill

    whilst other costs have risen.

    Network costs up 1% of total bill
    Government Renewable cost up 1% of total bill
    Government Social Schemes up 3% of total bill
    • bob bank spanker
    • By bob bank spanker 10th Dec 12, 12:18 PM
    • 533 Posts
    • 1,039 Thanks
    bob bank spanker
    • #8
    • 10th Dec 12, 12:18 PM
    • #8
    • 10th Dec 12, 12:18 PM
    I worked with E.ON as an energy sales representative (dubbed their "Home Energy Consultant") in 2008.
    I can confirm, and customers should understand, these points:
    1) Customers pay for gas and electricity with E.ON.
    2) Customers also pay for EVERY representative's / manager's company provided new liveried car.
    3) Customers pay for the fuel used for those cars - the rep buys it to refuel, then claims it back through the company as expenses (E.ON don't pay from their own pockets, it comes from YOUR fuel bills)
    4) Contrary to popular belief, the reps don't just get a very nice salary (thank you) each month to go with their FREE, fully expensed, brand new car.
    5) E.ON reps also get a rising commission / bonus rate for sales paid by the company each month based on "number of customers captured" - the normal "expected income level" stated by E.ON is 35,000 - 38,000 in the first year, if you don't hit that target you are "coached" to raise your conversion rate.
    I personally met one established "Home Energy Consultant" (just a sales person, not a manager) in 2008 who showed evidence his annual income from E.ON was almost 98,000 for that year!!
    LITTLE WONDER THEN THAT CUSTOMERS ARE BEING MADE TO PAY MORE AND MORE FOR BASIC SERVICES OF HEAT AND LIGHT. MAYBE THE COMPANY SHOULD GET RID OF THE HUNDREDS OF CARS GIVEN AS FREEBIES TO THEIR SALES STAFF, MANAGERS, ETC., AND LOOK AFTER ITS CUSTOMERS INSTEAD.
    Originally posted by exPC


    I'm guessing someone wasn't very good at sales.....

    Not sure what you mean by E.ON not paying for the petrol themselves, and that customers bills pay for it. It is an expense on the balance sheet, profit and loss is determined afterwards. Profit = revenue - expenses.

    Absolutely nothing new about having a rising scale for commission, normal practise in the sales environment to encourage performance. And if you don't hit your target, of course they are going to coach you. I suppose the alternative is they fire you.

    A top performer hitting almost 100k? They must have been doing well and been an asset to the company. Why on earth shouldn't they be rewarded for their hard work?

    You say the customer should understand your points, I am fairly confident that people who sign over the doorstep for their energy know that the salesperson is on commission. And again, customers do not pay for the car, the car is a business expense.

    I don't work in sales, and never have done, although I have worked in an auxiliary role, and there was a lot wrong with door to door energy selling. However I'm not sure the points you've raised have done anything to address that.
    • Michael_Nottingham
    • By Michael_Nottingham 10th Dec 12, 2:35 PM
    • 268 Posts
    • 2,690 Thanks
    Michael_Nottingham
    • #9
    • 10th Dec 12, 2:35 PM
    • #9
    • 10th Dec 12, 2:35 PM
    I would love to know what MSE suggests happen to prices instead
    Are you suggesting all suppliers have only one date per year that they can change prices?
    Are you suggesting that a supplier has to stop selling if another has increased prices?
    Or something else?
    • SnowMan
    • By SnowMan 10th Dec 12, 6:19 PM
    • 3,189 Posts
    • 5,947 Thanks
    SnowMan
    I would love to know what MSE suggests happen to prices instead
    Are you suggesting all suppliers have only one date per year that they can change prices?
    Are you suggesting that a supplier has to stop selling if another has increased prices?
    Or something else?
    Originally posted by Michael_Nottingham
    Perhaps if you had taken the time to actually read the article you would have found your answer

    It's time for a crackdown: a simple rule that says when a customer switches company they must be kept on that price for six months. This would add confidence to the switching process.
    I think that's quite a good idea myself.
    Last edited by SnowMan; 10-12-2012 at 6:28 PM.
    I came, I saw, I melted
    • Kushan
    • By Kushan 11th Dec 12, 11:38 AM
    • 70 Posts
    • 44 Thanks
    Kushan
    I think that's quite a good idea myself.
    Originally posted by SnowMan
    That may well be a good idea, but why is E-on being singled out here? As far as I'm aware, no other energy company does this and really, E-on has come closest with their price promise. Yet they're being made out to be the bad guys in all this?
    • SnowMan
    • By SnowMan 11th Dec 12, 12:09 PM
    • 3,189 Posts
    • 5,947 Thanks
    SnowMan
    That may well be a good idea, but why is E-on being singled out here? As far as I'm aware, no other energy company does this and really, E-on has come closest with their price promise. Yet they're being made out to be the bad guys in all this?
    Originally posted by Kushan
    I think the EON case is just a good recent example of a practice of encouraging people to switch on arguably false pretences prior to a price rise. The article could just as easily have covered customers switching to a variable rate tarriff with another company only to find out that variable tarriff had increased by the time they had switched. So perhaps it would have been better for the article to give examples involving other companies also rather than singling out EON.

    But it is a good illustration of why the 6 month idea is a simple and good idea.

    I personally think EON have really turned things round since their reset review (in terms of being fair to their customers) and have to say I would have no hesitation in switching to them if they were cheapest when my existing tarriff ends. And I think their reps do a great job on this forum.

    To add some balance as to other company practices I don't like:

    The npower direct debit discount of 100 that is only paid after a whole number of years is an absolute disgrace. It enables npower to look cheaper on the comparison sites and yet customers in practice don't or even can't switch away after a whole number of years and so don't end up paying the quoted price.

    And EDFs refusal to provide customers with their direct debit calculation is an absolute disgrace. They come across as the worst by far of the major suppliers, albeit I have never been supplied by them
    I came, I saw, I melted
  • Wywth
    That may well be a good idea, but why is E-on being singled out here? As far as I'm aware, no other energy company does this and really, E-on has come closest with their price promise. Yet they're being made out to be the bad guys in all this?
    Originally posted by Kushan
    First Utility currently promise to fix prices for 3 months from date of customer registration.

    But they are the only company I know that currently offer this type of promise.
  • Wywth
    And EDFs refusal to provide customers with their direct debit calculation is an absolute disgrace. They come across as the worst by far of the major suppliers, albeit I have never been supplied by them
    Originally posted by SnowMan
    EDF provided me with mine when I switched.

    It is 1/12 of the annual anticipated consumption cost based on the usage I declared.
    (It is calculated separately for each fuel, despite being on a dual fuel tariff and, after the initial collections, only one monthly total payment being collected)
    • JimmyTheWig
    • By JimmyTheWig 11th Dec 12, 12:19 PM
    • 11,871 Posts
    • 11,406 Thanks
    JimmyTheWig
    That may well be a good idea, but why is E-on being singled out here? As far as I'm aware, no other energy company does this and really, E-on has come closest with their price promise. Yet they're being made out to be the bad guys in all this?
    Originally posted by Kushan
    I think the problem is that e-on's price promise makes it look like they are coming closest but really they are doing very little of the sort.
    If it takes two months to switch then a promise in November that prices won't rise until January is meaningless - but sounds good.
    • Michael_Nottingham
    • By Michael_Nottingham 11th Dec 12, 12:39 PM
    • 268 Posts
    • 2,690 Thanks
    Michael_Nottingham
    Snowman - I did read the original article

    However I also thought through the costs and implications

    I am sorry but what you suggest will just encourage even more all the Big Six to move at exactly the same time - the costs of being forced to hold the price for 6 months at this time of the year are likely to be c50 - compare this to the profit for an average dual fuel customer.

    Also think through the IT complexity of giving every customer a fixed 6 months from switch.
  • Wywth
    I think the problem is that e-on's price promise makes it look like they are coming closest but really they are doing very little of the sort.
    If it takes two months to switch then a promise in November that prices won't rise until January is meaningless - but sounds good.
    Originally posted by JimmyTheWig
    It typically takes 4-6 weeks to switch supplier, and the E.on promise was first made (as far as I can tell) as early as last May.
    • Michael_Nottingham
    • By Michael_Nottingham 11th Dec 12, 1:02 PM
    • 268 Posts
    • 2,690 Thanks
    Michael_Nottingham
    Also, if they were left on the rate they switched on for six months, are you proposing that this would happen even if prices drop (i.e. they would be left on the higher rate?)

    In reality all this will do is skew the market back to benefit serial switchers if their prices are fixed for 6 months while existing customers prices can go up - non switchers will just end up paying for it as their prices are moved more quickly.

    I thought one of the key reasons for the recent OFGEM / Government changes was to ensure that existing customers weren't disadvantaged with all the focus on switchers.

    The truth is always more complicated than a newspaper strapline, but we have to be very careful that additional rules do truely drive competition / customer improvements.

    A good example is how the recent changes for online tariffs have led to lower discounts for switchers as the price differential has narrowed.
    • SnowMan
    • By SnowMan 11th Dec 12, 1:08 PM
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    • 5,947 Thanks
    SnowMan
    I did read the original article
    I'm not quite sure then why you asked what MSE would do when it was a set out in the article that you had just read?


    I am sorry but what you suggest will just encourage even more all the Big Six to move at exactly the same time - the costs of being forced to hold the price for 6 months at this time of the year are likely to be c50 - compare this to the profit for an average dual fuel customer.
    Originally posted by Michael_Nottingham
    It is probably better that if they are all going to have to put up prices then the changes are announced closely together. Otherwise there is a period where everybody has difficulty switching because they are comparing companies who have already announced their increases with those who haven't declared what they are going to do (but continue to market based on their old prices which they know customers won't be able to get by the time they switch as happened with EON).

    Also think through the IT complexity of giving every customer a fixed 6 months from switch.
    If an IT issue such as this was such a big consideration for them they wouldn't have introduced the huge and complex series of tarriffs that they currently have and would have kept to simple tarriffs their systems could cope with.

    If they can't program such a simple thing into their systems then they need to rethink their IT systems.

    They are already under an obligation to keep someone on the old tarriff rates where they switch away following a variable tarriff increase and the switch physically occurs after the increase. Presumably you would argue against that as well using an IT excuse?


    Thanks for your thoughts it has made me even more convinced the 6 month thing is a good idea.
    Last edited by SnowMan; 11-12-2012 at 1:12 PM.
    I came, I saw, I melted
    • MillicentBystander
    • By MillicentBystander 11th Dec 12, 1:19 PM
    • 3,450 Posts
    • 2,225 Thanks
    MillicentBystander
    BG's new IT system reportedly cost HALF A BILLION POUNDS - I really don't think excusing the Big 6 on account of a new measure being difficult from an IT POV will hold water, do you?
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