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Would marketing letters from energy suppliers make you switch?

Letters through door

Our latest research casts doubt on whether the CMA’s proposals to share customer data will encourage people to switch energy suppliers.

Two weeks ago the Competition & Markets Authority (CMA) published its final verdict on the energy market and its proposals for fixing it. When we asked you whether you thought these proposals were enough to fix the broken energy market, an incredible 25,741 of you voted ‘no’ (93%).

I want to focus on one of these proposals – the creation of an Ofgem-controlled database of customers who’ve been stuck on their supplier’s standard tariff for more than three years.

This would then allow rival energy firms to send letters to people (who haven’t opted-out to being contacted) with new deals and tariffs.

The CMA hopes this will encourage more people to switch supplier. But we’re not convinced.

A central database of energy customers

The CMA’s suggested measures to safeguard people’s data. It has also said there’s trade-off between ‘encouraging more switching and ensuring customers aren’t subject to excess or misleading marketing from firms’.

With 37 energy suppliers out there, there’s the potential you could be contacted by 36 separate companies encouraging you to switch.

Will this increase switching?

The question on everyone’s lips though is; will this work?

We surveyed the very people this proposal is aimed at – energy customers who haven’t switched supplier in three or more years. How would they view letters from rival firms?

  • Four in ten would opt-out of receiving marketing letters in the first place.
  • A third said they’d put letters straight in the bin or would just scan them quickly.
  • Almost half said they’d be unlikely to switch if they received a letter from a rival supplier with cheaper deals. Instead, they were far more likely to switch if their tariff increased or if they’d had a poor experience with their supplier.

The CMA still has until the end of June to finalise its remedies to fix the broken energy market. With two months left, the proposal for a central database needs some careful consideration. Will it increase switching or will it just lead to loads of unwanted letters through our doors?

And just to add, while most of us don’t currently get many marketing letters from rival energy firms, just 4% of people asked said they’d switch due to receiving one. It might not just be letters though.

Our supporter Richard is worried about cold calls:

‘The idea to set up a database of customers who have been on the standard energy rate for more than three years is ridiculous. All it will do is to open up the incidence of scam telephone calls and cold calling by unscrupulous companies.’

Your verdict on letters and databases

Now we want to hear from you. With an incredible 416,000 backing our Fair Energy Prices campaign, we need to continue pressing for a market that protects the most vulnerable and stops people from overpaying.


So what do you think about the idea of a database of customers who haven’t switched for three or more years? Do you think letters from rival energy firms will encourage people to switch? Would you be happy if your data was shared with Ofgem and energy suppliers?

Comments
Jon Darby says:
6 April 2016

I cannot believe the CMA get paid for the job they do?
Or are they simply in tow with the energy companies and doing their bidding.
Put Martin from MSE in charge of them and see the game change.

I think this misses the point, which is that the CMA wants to encourage consumers to move to cheaper tarrifs, not to increase energy-company profits or to promote rampant marketing.

You are so right Roy but some are too blinkered to see it !

Dosent matter what they bring in the energy prices won’t go down.if I abstract gas or electricity I would get a prison sentence these energy company’s rob us silly and get away with it .people are dying because they Carnt afford these prices this Carnt be right also we pay double what Europe pay this is not right

Grenville please learn to spell the Queen’s English! Canrt “Cannot” be right!

Paul Butler says:
6 April 2016

Don’t forget – the Government’s “GREEN” taxes cost each household £300 BEFORE we start paying for the actual electricity we use. As ‘Which’ said four years ago before they seem to have been nobbled by the Green brigade, you already pay £80 before you use ANY energy as a support for “GREEN” tariffs. Note that our steel industry is completely ruined because they have to pay MASSIVE carbon taxes, introduced by the EU and added to by our pathetic Tory government.

You’re right that Greenville spelt the same word wrongly twice but what a pity you then misquoted his misspelling with another version!

Istvan Szekeres says:
6 April 2016

Also Doesn’t matter, not “Dosent matter”

No it “can’t”. But I guess it “doesn’t” really matter.

Question is – do you disrespect somone more (and so disregard the views they are expressing) because they are rubbish at english, or because they are pedantic about it?

I support Green energy

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Marie Corbett says:
6 April 2016

Please Allan Pointer learn to read comments properly in the first place before nitpicking.

I would be happy for my actual usage figures to be made available to suppliers so they could make REAL offers

jane says:
6 April 2016

I want a website where I know that I can go to for a fair and unbiased comparison of prices. I do NOT want more advertising blurb, none of which I believe, filling up my paper recycle bag. Advertising blurb coming through my letterbox is automatically put in the recycle bag is NOT read. Similarly advertising on the internet. Any that comes as emails is automatically put into spam and is NOT read. Advertising is merely a con.

Go to the Martin Lewis website https://cheapenergyclub.moneysavingexpert.com/register. Good Luck.

I had been with one company for a good few years. I didn’t want to change suppliers and couldn’t see why I should as most of the energy only comes from one source anyway. I was really annoyed when anybody wondered why I hadn’t switched. If the CMA have their way then an awful lot more people will get annoyed for being harassed. I changed suppliers in the end as the result of a ‘Group Switch’ (with a guaranteed lower rate) which was the only thing that went some way to convince the big suppliers to drop their ridiculously high rates. I actually do pay less now!

Colin says:
6 April 2016

Price is not the only consideration, there is customer service too. I would, though, like to see regulation to require suppliers to support customer loyalty, not exploit it in order to offer cheaper deals to new sign-ups.

Normandie50 says:
6 April 2016

I think Ikea should start selling energy. This might put prices down!
Why would I trust them with the database when they can’t hardly add up to save me money in the first instance. Another issue is that it is complicated to understand their prices/charges/bonuses and some of the comparison sites don’t take some of the criteria into account. Every time I use a comparison site even though the one from Which? I am given a more economical energy company but in reality it is not. I just need to call the search winner and things are added. Therefore now I only challenge my current energy company and they provide me with the best tariff they have for me. Saying this, one thing I do often (every two months) and which helps me with my bills and DD payments is to provide a meter reading! I don’t pay over the odd anymore (I used to get over £100 in credit which was a nightmare to claim back).

But could you understand how to assemble the pipes carrying the gas, or the cables carrying the électricité ?

Martin Bowman says:
6 April 2016

It’s the same pipe and cable delivering the energy so why does each tarriff cost a different daily standing charge?

I think Martin Bowman’s point is very interesting! Just what does the regulator do? It seems to me the CMA is increasing the bureaucracy of Ofgen instead of addressing the issue of excessive profits!

I read mine every month, and if I am paying too much I can adjust the amount of my dd which is good

Standing charges are a con. We should pay for the actual energy used and the supplier sort their internal finances

Correct, it’s like airlines charging a ‘handling’ fee when you actually collect or print your own boarding pass also phone companies charging a ‘connection fee’ on top of the actual call charge when you make a phone call. And beware the credit cards who offer zero percent balance interest for 18 months and sneak in a line about their 3% balance transfer fee which will apply. Theses companies must employ vast numbers of Marketeers whose job it is to think up more devious back handed ways of making money.

Pat says:
6 April 2016

renewable energy should be a priority

Absolutely NOT. Renewable energy is the most expensive means for generating electricity; cheap and economical is what we want.

Pat says:
6 April 2016

I disagree. Having a tight budget doesn’t mean you can’t be green. Do some research

Anthony says:
6 April 2016

And you wouldn’t mind a nuclear power plant built by the Chinese (with all that entails) and/or a dump for the waste near your home ? Or pay for that ‘economical’ waste to be buried and to subsidise the nuclear power energy until those foreign investors will take the risk of building a plant ?

Incredibly short sighted viewpoint by a likely climate change denier. If you won’t voluntarily cut your consumption and take energy saving measures at home, you should pay for your over-use not all of us via the climate.

We have to start somewhere with renewables but I am not convinced that the £300 paid by each household per annum is actually getting to where it is needed. There have been numerous tidal projects proposed but they just seem to disappear without trace. Then this stupid Gov. cuts solar subsidies, virtually destroying an industry at a stroke.

Pat says:
7 April 2016

Incredibly presumptuous. Don’t just pluck figures from the tabloids. Again, do some research

It would be useful if you provided some information and links, Pat.

Nationalise the lot, because we subsidise europe, that’s why their bills are lower than ours.

Compare the price in britain & europe.

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What paranoid rubbish!

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I could not give my supplier although it was from Which? I got the name: Avro

Whether people change or not, unless it is on a contract of a pre-determined length and price (which generally tend to cost more anyway), then energy companies are free to increase prices at will. I am tired of people who, for whatever trumped up reason, want to share our data with others… whatever happened to the right to privacy? If I want information I’m more than capable of asking for it thank you very much and, if I’m not happy with a supplier, I’m also capable of making a decision to switch without being bombarded with junk mail…

I totally agree with Jacqui. I am fed up with my personal details being sold indiscriminately to organisations that I have no wish to deal with, and I am also quite capable of doing my own research without outside interference!

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Fed up with all the junk mail that come’s through the door.

Customer Service is very important too so if you are satisfied with the existing supplier all well and good. My sister-in-law switched and found she was not better off and had serious problems with Customer Services.

Linda Brown says:
6 April 2016

it is against the law to share details of customers data without prior permission
from them as told by the ocf l have had experience and always sign
the small print which gives you the option to do this

Is this EU law or British law? Would the law disappear if we leave Europe?

I know I can get cheaper electricity and gas, but I am with my current supplier for environmental reasons. Everybody else who can afford to pay a bit more (not a lot) for renewable energy should do so, for the sake of their children and grandchildren. If in doubt watch “The Age of Stupid”.

I have always been against privatisation of Gas, Electricity, Rail and Transport industries as they are essential to this country’s well -being. Bring them, and any other essential services, back to nationailisation

Rick says:
6 April 2016

Quite right. Then we can have a price that isn’t born from the overriding interest of profit and shareholders before customers and those whose needs are greater than others. In fact, the customers they serve, (wouldn’t that be refreshing), would be the shareholders, stakeholders and ruling body politic for a change.

Part of me agrees, but has there ever been a government run body that was not inefficient?

British Rail. & the old gas & electricity boards, were more efficient than what we have now.

Another body paid for by who????? Taxpayer??? When Iread the comments already posted it was as if I had already posted comments, rubbish bin being the most common phrase.

Let’s just have one ‘official’ government backed source of information where we can clearly see an energy , like for like, ‘price list’. Companies still go to great lengths with a range of tariffs, model numbers and the ever changing ‘terms and conditions’ to ensure that we cannot accurately compare actual costs. This scenario also applies to almost everything we set out to buy, e.g. white and brown goods and financial products etc.
Also, can we imagine a situation where a provider will happily recommend that a customer should go elsewhere for gas and electricity? Can we imagine Mars simply suggesting that you should buy Cadburys chocolate or Unilever recommending that a product from Proctor and Gamble is a better buy?
Cheapest, of course, is not always best and many other aspects relating to customer service etc. must be taken into account but please ditch the idea of suppliers sending out a wad of confusing leaflets and give us access to a definitive fair comparison price list. Consumers can choose to switch and save or ignore it and pay the price.
On a separate, but related issue – governed by toothless regulators and watchdogs who appear only to be able to make ‘recommendations’, how long until we have just one energy supplier, one mobile phone service provider, one supermarket, one bank and one insurance company. When that happens, and it will, prices can only go one way.

Er yes Dave – UP!

£849 a quarter bill for electric thats for a three bedroom house emersion heater a two bar electric fire thats almost my monthly salary disgusting.
my gas was £6that same quarter edf puffft