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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

I think its intrusive, borderline harassment and all about money and greed, how come these companies are making billions of dollars at the top but yet the majority of people who pay their gas and electric bills are being charged over and above of what it really should be.

Because we in this country no longer own our energy and we in effect subsidise the customers in the countries of the energy suppliers.

As our governments have sold off every thing to mainly foregone company’s we loose out as they now pay no tax here and it as ended up us subsidising the French Germans energy so we loose out all over higher bills and they now pay no tax and we have lost the asset value yet our government still want to subsidise EDF to build power plants for them to make a profit

Janet says:
7 April 2016

Join an Energy Club – my joint energy payments dropped from £72 a month to £42 with the same supplier.

Lesley says:
7 April 2016

Sounds interesting – how do they work?

What is an Energy Club? How do I find one?

Look at 38 degrees and ‘the big switch’ .
Places for People also seem to do competitive energy deals now. But there must be others.
You just have to look around a bit.

Brian says:
7 April 2016

Or sign up with Martin Lewis. I’ve moved twice with his club deals and its been very easy. Brian.

A local group of people or businesses who come together to use collective bargaining power. You would need to search online for a local one to you.

Anne says:
9 April 2016

Yes me too . I have recently saved £20-30 pcm to stay with British Gas who I have always been with even though I changed tariff each year to their cheapest available deal. The Club deal is only available via a club. I had resisted this money saving tip from Martin as it seemed a lot of hassle and I thought I would be leaving and rejoining – not a bit. My account number stayed the same and everything, direct debits did not require stopping and restarting, literally just went down.

Get it right by making it clear for older people to understand compare and realise it is easy and safe. There really is only fair competition when you can compare the financial rewards so I propose a simple traffic light graph that indicates a scale of value for money, ease of communication access by phone and online and quality of customer service rating, and technical options for example smart meters and prepay options that give instant cost bonus for fuel credit on market change and unit credit for advance payment this would be based on the top Ten providers that offer dual fuel and Top five gas and respectively electric only providers.

Some people quite simply do not use the Internet to be able to compare and switch and many people do not feel confident on the phone either because they are old and hard of hearing or possible are independent but mentally challenged vulnerable people that’s why leaflet or letters dropping through the door should be monitored and controlled sent only to certain age groups and people not sent at great cost to every house hold it should be selective and perhaps options by Doctors, social workers, care workers and charities to offer help with pick up leaflets in Supermarkets, Surgeries, Opticians etc

The energy companies have been bleeding us dry for years, they can only get away with it with help from a greed driven Government.

I know all about free markets I need to know and they are ripping us off
If we keep blindly on this route of belief that only free trade has the answers we will go back 100s of years because it was free trade that resulted in the poverty and child labour years of the past
Free trade is free trade for BB and another name for off shore
BB an Gov dont give a d**n about you or I

This comment was removed at the request of the user

Maybe a fair comment about energy companies, but the government has to somehow pay off and reduce our enormous debts. Austerity is essential. We just cannot go on borrowing ever more money.

This comment was removed at the request of the user

This comment was removed at the request of the user

I dont do thumbs down but I do write

The borrowing would not required by either Tory or Lab if business paid their tax’s

If the tax’s were all paid as they should be we would not need this torture

How can you suggest that we HAVE to pay back debts when we as a country already have the means to generate tax. . . We are in the top rated countries in the world so we do generate a load of potential wealth all we have to do is stop a load of theiving thugs running off with it

After all they BB etc alone are the biggest earners right across the world and seem to get away with this off shore lark then use the likes of Panama Banks to reintroduce the money back to where they really want it
No common or middle/upper class wins with this lot or with these laws or theories
The only winners are the super rich

The people of Cayman are in even more poverty than most of us and as to Panama go do your homework

What does one do if one wants a house or app in the likes of London. . . The Chinese super rich thieves have been and bought the lot and forced the natives out

Well the government can do that some other way sunshine.

I selected my current tariff as it contained certain inducements. I fully understand that there may be a cost involved but that is a price I am willing to pay for this particular inducement! That’s my choice! I am fully aware of what I am doing and the Power company are not taking me for a ride. It is not for the CMA or any other body, to interfere!

Tony hill says:
7 April 2016

Would this not be a breach of the data protection act, or even the mailing preference service to not receive junk mail. Think again about this because I am willing to bet that there are some who would be willing to take further action against this kind of hijacking by those in charge, of a private citizens PRIVATE information and an informed choice whether he/she wants to shop about for prices. This is tantamount to bullying by the state, interference by government bodies with no right to just do as they please without consent from the individual. STOP treating us like children you sanctimonious people, we are more intelligent than you give us credit for.

John G. Dell says:
7 April 2016

Show me any person with any kind of power and I will show you a crook !!!!!!!!

Mary says:
7 April 2016

I have chosen my energy suppler for ease of communication and because they are a supplier of green energy and I do not need any further information. I would opt out immediately should all energy supply company be allowed to send communications.

These CLUBS/LOCAL COUNCILS involved with these systems must be held responsible to their customers in all aspects. Must be verified by LAW to give service and not be able to walk away from the commitment of supple.

John says:
7 April 2016

This is a government that that allowed our state run energy to fall into the hands of other country’s that do not allow there state run energy supplier to be sold. This government could solve this problem by forcing a standard rate across the board. all these energy suppliers support fat cat boards of directors plus support staff, if we had one supplier we would only need one board of directors that would answer to the customers this would bring down the costs and only one point of investment so we do not rely on other country’s to build our generating plants.

Marty says:
7 April 2016

Switching is a waste of time. Cheap initial offer then the prices go up to match the rest! Gas and Electricity are natural monoplies. Re-nationalise and then control the prices!

P. F. Schofield says:
7 April 2016

We are advised by many people to switch suppliers to obtain a better tariff, but what prospective suppliers do not advise, unless requested, is that though people can qualify for the Warm Home Discount, they are not in receipt of it as the prospective company is not a signed up member of the scheme. The Warm Home Discount is for young family`s on a low income and for Pensioners, and the current sum is a Discount applied to ones Electricity costs and amounts to the sum of £140-00 for the year. This is a topic I have raised with my M.P., the National press, AGE UK, and other bodies, non of whom feel it necessary to make this information Public knowledge, and if the person qualifying has just had it awarded in their last bill, it sometimes does not occur to them to ask this question, and they lose it, as happened to me when I switched to OVO.

Energy should be free to all! Watch video – Thrive what on Earth will it Take.
We all collectively just need to stop paying for it!!!!

Energy companies are rather like schoolboys – they get away with whatever teachers (or the CMA/Ofgem, in this analogy) allow them to. As with all types of regulation (Press, Police, Parliament, etc) it is only as robust as the regulartory bodies overseeing it. Sadly, too many of them are put in place to pay lip service, without any real teeth, as such.

Allan McDigger says:
7 April 2016

Sounds like a recipe for more junk mail filled with masses of small print.

Regulators are there to regulate the market and it’s suppliers. It is clear that the energy companies are overcharging loyal customers and the regulator should take action against them and stop blaming the victims. The last thing customers want is more unsolicited marketing and general harassment from these companies, especially as their past behaviour led to the banning of many of there sales practices.

A. Andrews says:
7 April 2016

This is a waste of money. If companies can afford to do this they could lower prices for everyone. I don’t want any more junk mail and if I got it from lots of companies I would just put the lot in the recycling bin without looking at any of it!

Given a mailshot, it gets cursory attention before being binned. If all income were taxed at source, for everyone, including tax havens, it would become less attractive offshoring money. Governments just need to lean on tax havens and starve them of whatever resources they need. Trade embargoes anyone?

My pet hate is banks and other organisations who regularly send out new terms and conditions involving pages and pages of small print. One has no idea what was there in the first place, let alone what has changed. Such Ts & Cs are always going to favour the organisation over the customer, sneak in things about the use of our information and give them rights we know nothing about.

Advised by First Utility that the tariffs for dual fuel they put me on were now expensive and offered cheaper one however they had imposed a penalty of £60 for me to change if I did so. So I changed supplier. FU wrote to me later welcoming me as a new customer I wrote back to them saying I had left for another company and to get their facts right.
The Utility Companies are out of control and have leave to fleece the public whilst the government could not care less. We in UK have the highest fuel prices in Europe thanks to this governments obsession with green taxation making our manufacturing industry uncompetative see British steels problems

It is unusual for an energy supplier to impose a penalty if you change to another of their tariffs. If a penalty is imposed it is normally when you change to a different company.

The complexity of business is exemplified by Tata Steel making a £700 million profit out of selling unused carbon credits. Two questions arise in my mind – why are they given unnecessary credits in the first place, and why can you pay to pollute – which is what those who buy carbon credits are doing. It’s just like being able to enter the Ultra Low Emissions Zone in London with a high emissions vehicle – providing you cough up a small charge (and make all the inhabitants cough up because of you).