A virtual CEO explains why energy profits are on the up

Hello Ms Virtual CEO, You could ‘win’ me over by showing the wholesale price of gas and electricity in force over the time of my current bill / annual statement. And not tell me your buyers only buy in bulk just as prices drop and never before rises in the wholesale price. ‘Cos if you do can I suggest you sack the lot of them as they’re clearly not doing your customers any favours.

Oh and out of all of your excuses, I don’t believe “‘I’m not making money from selling gas and electricity to customers, the profit is from the generation side. Actually, I’m losing money from the retail side of the business!’”

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Jenny Driscoll says:

OK William, I will get my virtual Executive Assistant on to this right away!

Actually I have already been contacted by a supplier saying they want to talk further about what they should do re profits and trust from customers. Another example that Which? Conversation gets noticed. Any other ideas anyone? Keep them coming in and we will pass them on to the companies.

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dragilex says:

Essential service companies (gas, electric, water, etc) should have their profits capped, rising in line with interest rates (during hard times all should suffer), any profit above the cap should go back to the consumer.

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Nikki Whiteman says:

I like william’s idea – wholesale prices printed on statements? Yes please. I think I’d also be more convinced I was getting a good deal if energy companies improved their customer service – not just by treating me better, not taking more money than they needed, etc, but by being transparent about what is happening with my account. I’ve switched energy companies quite a bit since I moved house a couple of years ago, and although the switch itself has always been relatively easy, I feel like I’m left in the dark a lot, needing to call expensive premium-rate numbers if I want to find out what’s happening with my account, how much money they’ll take from me, and when they’ll take it. Show you’re earning your money by letting me know what’s going on. If something takes 2 weeks and a lot of work to do, tell me and help me better understand where my money’s going.

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william says:

Hi Nikki, Unlike you I’ve been with the same supplier for years and funnily enough they have an 0800 number to contact them.

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Nikki Whiteman says:

That’s really good, william. We did some research recently on which companies have 0800 and 0845 numbers, so seeing the list is handy: https://conversation.which.co.uk/money/premium-phone-numbers-loyal-customer-services/ Quite a few suggestions on the thread were saying that companies should offer regional numbers as well (for those calling from mobiles, who do still have to pay for 0800). I’ll stop now as I’m veering off topic, but it’s interesting research – includes banks and insurance companies, etc too.

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Jennifer Davis says:

http://www.edfenergy.com/products-services/for-your-home/price/your-bill.pdf

I like the idea of including wholesale prices on people’s bills, but in my opinion, I wonder how many domestic energy customers would be interested in this level of information. I’m also concerned about making bills more complicated than they already are. But I’m happy to proven wrong!

Personally, I think it might be more useful for consumers to understand how their energy bills are made up – considering that only around 50% of their prices cover the cost of the energy itself. This PDF from EDF Energy explaining their energy prices is a good example, I think:

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william says:

Since November 2010, wholesale electricity has increased by 22% and gas 39%†

Yet we’re now in Aug 2012, there’s no mention of the fall in wholesale prices during most of this year and the tail end of last year. The pdf leaves me asking more questions than it sadly answers.

So can I assume they’ll update it once we’ve had a period of wholesale rises ?

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william says:

Operating costs 20%, most of what they”ve listed would surely be a fixed cost per customer and not a %age. Does it really cost more to read the meter of a high user then me a very low user, I think not. And are they’re trying to tell me they’re not making any profit ? Again, I think not.

The idea is a nice one, but the information provided doesn’t really stand up to any sort of scrutiny

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e.on says:

We’d like to hear what sort of information you’d like to see from us. As part of our Reset Review we looked at how we could be more transparent and we’ve published information on what makes up your bill on our website and also included links to information from Ofgem on profit levels. Any other suggestions would be great though.

Perhaps the difficulty is that some of the explanations your virtual CEO gives for his profits could be true – after all, large companies tend to have large costs, large numbers of employees and make large profits. If there were 10 times the number of energy suppliers and they each earned 10 times less, the overall level of profit would be just the same but there would be no big headline figures. Changes in the weather do affect profits. Some companies do make significantly lower margins on supply than they do on generation.

Do we just need to be clearer about how we explain things and give customers more information so that they can check out our explanations?

It might also be worth thinking about what sort of profit is acceptable for an energy company to make. If there were agreement on this, would that then help customers to believe the explanations that CEOs (real or virtual) give? So what sort of percentage profit should energy companies earn on selling electricity and gas?

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wavechange says:

Here are a few suggestions, all of which have been made before:

1. Please stop keeping most customers in credit most of the time. I have frequently called when I am £100 in credit and some of your customers have much higher credit balances. That is not fair.

2. Do not increase Direct Debits where it is obvious from the credit balance and past use that there is no need.

3. Let customers have an email address for Customer Services. A web-based form is no substitute.

4. Please provide a geographical telephone number. Using 0845 numbers costs many customers money, whereas geographical numbers are included in many tariffs. Better still, an 0800 number, at least for complaints. Why should e.on (or any other company) make money out of customers making a complaint.

To be positive, your bills are very clear and could be a good example for other service providers.

Thank you for the opportunity to give feedback.

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frugal ways says:

“Do we just need to be clearer about how we explain things and give customers more information so that they can check out our explanations?”

Stop deceiving customers would be a good start Eon.
Personal experience being one of your customers has taught me that Eon cannot be trusted to tell the truth.
Credit disappearing from a prepay meter on three occasions
“oh it must be a faulty meter we cannot effect your meter from our billing department”
– credit magically stopped disappearing after the next key top up

“we shall arrange for your meter to be changed and tested, it can take upto 8 weeks though but at least we will know if it was at fault!”
10 weeks later, after no promised call back, customer services (use that term loosely) read back account notes – nothing about testing a meter on there at all (criminal offence keeping incorrect records) and no call back requested, which is irrelevant anyway, as “Eon cannot choose which meters to test, only a certain percentage are tested!”
– Lied to me your advisors did, fantastic way to reset trust with your customer base!

New prepay meter is fitted, but now takes off £60 per month instead of £45 as before (old meter settings had been checked already and were “passed” as being correct)
“It must be your appliances!”
All appliances are under two years old and “energy efficient” – don’t use a dishwasher, don’t use electricity for heating/hot water, got rid of dryer, etc.
Was passed to energy efficiency department despite saying I didn’t want to be (not listening to customers again!) they said it must my appliances, then sent me back to billing.
– No one at Eon is interested in sorting out the now 25% increase in cost of electricity, left without any explanations, it’s always “we can only measure what you use” – utterly clueless!

“Eon are cutting the price of their electricity by 6%”
When I found out that my “6% cut in electricity price” was only 5.3% – I was told the 6% figure was “only an average figure”
Funny that, as on Eon’s own website, it clearly states the cut was 6% on standard tariff – which is what I’m told by Eon billing I am currently paying.
http://pressreleases.eon-uk.com/blogs/eonukpressreleases/archive/2012/01/16/1778.aspx

“E.ON has today (MON 16 JAN) announced a 6% decrease in its standard electricity prices” –
“E.ON UK Chief Executive, Dr. Tony Cocker said: “We understand that household bills are the most pressing concern for families across the country. Reductions over the last few months in the wholesale price that we pay for our customers’ energy have now allowed us to help as many of our customers as possible by cutting our electricity price. This 6% cut will help some 75% of all our customers*”
The * refers to: “An estimated 3.7million customers or approximately 75% of E.ON UK’s domestic supply customers.”
“Key details:
How much is the decrease announced today?
•6% reduction in E.ON’s Standard electricity price”
I don’t see any mention of “it’s on average” there do you Eon!

Of course these “6% cut” claims were repeated all over the media, on the BBC website, guardian, sky, ITV, etc, etc.
Didn’t see a single one of them quoted as “an average”
I was told by consumer focus, that this misleading practice was being “looked into”
After weeks, consumer focus came back with, “it’s just an average figure” words right out of Eon’s mouth!

This leads me nicely on to my final point, involving both consumer focus and Which? along with Eon.
We are told often enough that which? and consumer focus are against doorstep selling by energy companies?
Strange then that in a “reset” meeting with which? consumer focus and Eon, they agreed that doorstep selling was acceptable!
“It was agreed that there needed to be the same approach for all channels and noted that doorstep sales might provide another way to engage customers where a customer was not online” 26th january 2012
Eon have conveniently changed the link, ever so slightly, to the catalogue of meetings as was previously posted on the Eon website.

When you scroll down to 26th January meeting where you can read the agreement made at the meeting, what a surprise… Eon’s link takes you to a now dead page!
When I asked Eon, they said that they are happy with the notes published for all to see.
When I asked which? they said they agreed with it but oppose it! (refused to answer when I asked which? to pick an answer instead of having both!)
When I asked consumer focus, they wouldn’t even acknowledge they gave an answer, instead they pointed to a prereleased statement from ages ago, saying they opposed doorstep sales.

Consumer groups are more concerned with having the ear of energy companies rather than acting on customers behalf and taking action when neccessary.
Eon, you can’t be trusted with an apple!
“Reset” is nothing more than an expensive marketing campaign (paid for through your customer’s bills!) to give the perception that you are doing something about your appalling lack of service and overpriced energy, while keeping consumer groups (exactly how is mumsnet owner a consumer “expert”?) onside and engaged by throwing them a few crumbs now and again.

Don’t worry though Eon, it’s not like any of your customers will go cold just to save some money so they can eat this winter will they….

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Jenny Driscoll says:

4 August 2012

Hello
Re doorstep selling. Which? applauded the moratorium on doorstep selling as it has done so much damage. However, I’m interested to hear your thoughts on whether it is ever acceptable. For people who don’t go online, could a visit from an energy rep be effective in getting a cheaper deal? However there would have to be a major change in behaviour and the industry needs to show it can be trusted. Sales reps need to be incentivised by responsible behaviour and not just by sales and if any employee is involved with mis-selling/pressure selling then customers must see quick and effective punishment and no consumer should be left out-of-pocket or feeling hassled. Does anyone think that this could be achieved? Do you ever feel it’s OK to buy at the door?
While there is clearly a problem with doorstep selling, there are people stuck on expensive energy deals who do not go online. How do we help them get on to better deals?
Jenny

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frugal ways says:

4 August 2012

A simple example;

If 1 Million people switch energy provider – at £40 commission per switch, some commission per switch will be higher, some will be a bit lower, that’s an “industry” on the back of bill paying customers of £40 MILLION pounds a year!
The vast majority of these will be paying the regular amount, the switching websites/energy companies, use marketing to tell people they are “saving xxx amount per year off their energy bills” but in reality, those that switch will be paying the basic rate we all used to pay, for those that don’t jump on the switching train, ie, the vast majority in the UK, they will be paying over the odds.
How many energy customers are there in the UK?
27 Million homes in the UK, that’s a hell of a lot of potential switching opportunities for what amounts to a monopoly of just 6 energy companies!

Which? along with other comparison websites are making huge profits from commissions, on the back of switching customers. There are no protections in place for any switching websites as no regulation exists for the industry – not like regulation has been anywhere near effective for all other areas of business – switching energy providers is marketed as a golden arrow to get energy bills under control, when it clearly is not.
Now whom do you suppose is paying for all the switching commissions that are being paid out?
The bill payer by any chance?

The record prices across all areas of our lives for things we have to pay for and comparison websites are no coincidence.
Insurances, energy, holidays, flights, etc, all at record high prices in rip off britain, yet we can all “compare, switch and save money” – pull the other one it’s got bells on!
Commission payments for switching are paid for by hard pressed people in the former of higher prices and bills.

Now for your dorrstep selling point directly.
Which? (along with other “cunsumer forums”) have campaigned to end doorstep selling.
When I read that which? had agreed with it in private meetings with Eon, I couldn’t believe what I was seeing.
I asked Eon did which? agree to doorstep selling at the meeting, they were unable to give me a yes or no answer, pathetic marketing nonsense was all I got back from them, “we are happy for the notes from the meeting to be published for people to see” and “we have not hidden anything from our customers”
Which? were even more vague, trying to shift my questioning from a public forum on twitter over to email, as it was “quite complicated” and “not really able to explain in a twitter reply” – all I asked was why did which? agree to doorstep selling in a private meeting with Eon, several times, over a few days.
Which?’s answer, after speaking to Eon I presume as both deflected giving any answer, was equally as pathetic as Eon’s answer was.
“We agreed that ‘doorstep sales might provide another way to engage customers where a customer was not online’, which is true, but that doesn’t mean that it is the best way to do so, or that we support it or recommend it. As we’ve made clear often”
Eon’s notes from the meeting (now magically disappeared from their website and public view) noted that doorstep selling was agreed to as a way to help energy customers switch.

Consumer focus were even more vague, refusing to answer and posting a link to their official statement on doorstep selling.
Nice to know consumer groups are fighting our corner eh?

How about which? tell us their view on what is now happeneing, regarding it remaining ok for Eon to continue to use doorstep selling, but instead of cold calling they arrange appointments to visit people in their homes?
According to the minutes of the meeting back in January with which? and consumer focus, Eon state that they suggested increasing the numbers of “appointment arrangers” in shopping centres, on the high st and telemarketers, etc.
Which? and consumer focus agreed to this.

Makes a mockery of those high profile campaigns of which? and consumer focus against doorstep selling.
In your reply Jenny, you are now asking me questions about issues that which? have already agreed to in meetings with Eon!

“For people who don’t go online, could a visit from an energy rep be effective in getting a cheaper deal? However there would have to be a major change in behaviour and the industry needs to show it can be trusted”
By your own admission and by the fact that the history of energy company’s actions, shows they cannot be trusted, why bother asking?
Why would a consumer group propose to put a customer in such a position?
Too close to OFGEM and Eon I think!

Sales reps need to be incentivised by responsible behaviour and not just by sales
No, they need to be prosecuted for deliberately misleading a customer at the point of sale.
Where’s the deterrant for a company fine, being negotiated down after talks with OFGEM?
Was it EDF that were “fined £4.5 Million” recently? only it wasn’t a fine at all, they were fined a pound (Yes just £1) two weeks later, they were awarded a £13 Million contract by the government!
They didn’t even lose their “compliant” status with OFGEM.

“if any employee is involved with mis-selling/pressure selling then customers must see quick and effective punishment and no consumer should be left out-of-pocket or feeling hassled. Does anyone think that this could be achieved?”
In the same way it is now?
Which? have been telling us for an age that this isn’t happening, why try to stimulate debate about it?

“While there is clearly a problem with doorstep selling, there are people stuck on expensive energy deals who do not go online”
A problem? Understatement of the year that is. It’s only a “problem” because the regulator that taxpayers are shelling out millions to are so far out of touch, they wouldn’t recognise a monopoly if the waddingtons factory fell on them.
Do the job or get out and let others have a try. Anything is better than watching former industry employees at OFGEM failing to regulate.

“How do we help them get on to better deals?”
We can’t!
Better deals won’t help – equality in the billing process will.
Why does someone in Lancashire pay a different price to someone in Wales?
Why does house A pay more for their energy than house B across the road?
Same houses, same supply pipes, same company…

Whilst which? (and other consumer groups), comparison websites, the big 6 energy companies, OFGEM, and the DECC, pontificate around with campaigns, meetings, energy forums and other pointless discussions and marketing, you are all collectively missing one basic fact.

Energy is not the same as buying a car.
Energy is a basic human requirement and should be treated as such.
There are many people whom will be forced to cut back on heating their homes, washing their clothes, cooking their food, etc, this coming winter, because they simply cannot afford it.
They have NO CHOICE but to do this.
Where as energy companies, consumer groups, government, OFGEM, all have a choice, they can ACT to stop this, or they can continue to let it happen.

From what I’ve seen and heard in the past few years, you all talk a good game, but when push comes to shove, you do nothing, you are as bad as each other!

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frugal ways says:

8 August 2012

One question for you Jenny.
Every customer whom switches their energy provider or tariff if they stay with the same provider, are fed the industry marketing line, “you have saved £XXX by switching” – it’s on adverts, promotional material, it’s pushed down our throats constantly by consumer groups, switching websites, MPs, energy companies, the DECC, etc, etc.
While the switching customer gets a perceived “deal” they are paying less than an existing customer that has roughly the same energy usage.

Whom do you (or which? for that matter) think are paying for this perceived saving for each switching customer?

My bet would be the existing customers of that energy company are forking out for it all.
Existing bill paying customers are paying for;
* The “savings” given to new customers when they sign up
* The commission that the switching website receives per switch (Upto £50 per switch in some dual fuel cases!)
* Any (unenforceable) termination fees for transferring before the end of the contract

It’s happening across all areas of business, car insurance, holidays, credit cards, mortgages, mobile phone contracts, etc.
Running on which? at the moment is a highly promoted “fixed is fixed” campaign… at the same time as posts question how companies can change contract terms so often… well if people keep switching to new contracts, what better opportunity for companies to add in little terms & conds that benefit their profits!
Mobile phone contracts are a great example of the dangers of constant switching to new contracts, over 90% of people (myself included) were not aware of future RPI price rises being included in their contracts, until it was stumbled upon when the companies concerned increased prices and customers were left without a leg to stand on.

Switching energy (or anything else for that matter) does not “save you money” it increases the burden upon existing customers of that particular company.
You can switch energy and “save £100” but by the end of your two year “deal” I’d wager most would be paying more than the company’s new customers.

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e.on says:

8 August 2012

Hi Wave Change

Thanks for your suggestions, I’ve responded to the points you’ve made below. Hopefully we’ve already answered 3 out of the 4 points you make – you are not the only one who has raised these with us! We’ll look again about how customers can contact us though.

If you have any other questions about our customer service, then you might want to check out our Facebook page this evening. Darren Cornish, who heads up our customer service department for home energy customers, will be hosting a Q&A at 6pm on that very subject.

E.ON

1. Direct Debit credits

We refund any credit above £5 if the account has been billed to accurate readings at the time of your annual review. Refunding credits at some points of the year could be risky though – for example you do need to build up a credit over the summer months to cover your higher energy use in the winter.

We’ve recently made changes to our Direct Debit policy – previously we’d try to get all customers to a zero balance in the Spring so you’d build up a credit over the summer and eat into this over the winter, but never be in debt. We’re now moving to an anniversary review meaning that customers could be credit at some points of the year or could be in debt at other points.

If you are building up a credit on your account then you should contact us and we’ll see whether a refund is the right thing to do at that point in time. If so, we’d probably also want to review the level your Direct Debit is set at. We do this behind the scenes every time a bill is produced anyway but perhaps your circumstances might have changed so we might need to have a chat with you to find out more.

2. Increasing Direct Debit payments

We shouldn’t be increasing Direct Debits if there is sufficient credit on an account and payment levels are set to the right level to cover consumption over a year. If we have at least a year’s consumption information for a customer then we should be able to clearly calculate whether a Direct Debit increase is needed or not. We just divide your expected consumption by the number of months remaining until your annual review.

Even if you have a credit balance, we might still need to increase your payments if this, plus the expected payments, will not cover your consumption. It might be that prices have gone up, for example, or if something has happened in your life to mean that your consumption has increased.

3. Contacting us by email

We introduced web forms for customers to contact us as we had found that customers were often emailing general email addresses but not including all the information that we need to answer their question. It was also taking more time than we’d like to get the query to the right team to answer. Web forms help us to do that more easily but we’ll have a look again to see whether this is the right thing for customers too.

4. Contacting us by phone

Good news – we are in the process of switching to 0345 numbers. These are local rate numbers and, as you say, are included in many price plans. All of our numbers will be local rate. We did look at whether we should move some numbers to 0800 but we found that more and more of our customers are calling us from mobiles and many mobile networks charge for calling an 0800 number.

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william says:

8 August 2012

Hi E.on re point 3, I’m sure one of your web developers should be aware of this but in case they aren’t

It is also possible to specify initial values for headers (e.g. subject, cc, etc.) and message body in the URL. Blanks, carriage, returns, and linefeeds cannot be embedded but must be encoded.
Send email

Taken from http://en.wikipedia.org/wiki/Mailto

Regards

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frugal ways says:

9 August 2012

“…you do need to build up a credit over the summer months to cover your higher energy use in the winter.
We’ve recently made changes to our Direct Debit policy – previously we’d try to get all customers to a zero balance in the Spring so you’d build up a credit over the summer and eat into this over the winter, but never be in debt. We’re now moving to an anniversary review meaning that customers could be credit at some points of the year or could be in debt at other points.
Marketing nonsense – more like you’ve been caught out getting in effect, interest free money off the back of all of your customers, which you can then place in an account and receive interest on, which increases your profits instead of passing it back to your customers in the form of lower bills!

Other energy companies pay customers interest on their credit balance upto a certain amount, why don’t Eon do this?

“…customers could be credit at some points of the year or could be in debt at other points”
You mean like it was before?

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wavechange says:

12 August 2012

Thank you e.on, but please don’t take to long to provide us with an email address. I understand the reasons why companies like customers to use a web-based form. Here is my suggestion for how it could work efficiently for those with online accounts:

The customer logs in to their account and clicks a button to request to send an email. The system automatically responds by email, including whatever identification is needed. The customer responds to this email with their query. The only disadvantage is that there will be a short delay waiting for the automatic response.

I will be interested to see whether the forthcoming changes deal with the problem that I and many others often have large credit balances on their accounts. A system that would allow us to pay for what we have used would suit me and many others, but when I have suggested this I have been told that I would pay more for my gas and electricity.

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frugal ways says:

12 August 2012

“3. Contacting us by email

We introduced web forms for customers to contact us as we had found that customers were often emailing general email addresses but not including all the information that we need to answer their question. It was also taking more time than we’d like to get the query to the right team to answer. Web forms help us to do that more easily but we’ll have a look again to see whether this is the right thing for customers too”

A customer sending an email is an official notification in writing, same as a letter sent through the post.
Filling out a webform is not official “notice in writing” which is why big business prefers to use them, less obligation to respond and no need to officially recognise the detail contained within and act upon it, which can be a very important factor.

Of course this is just me being cynical, or is it?

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frugal ways says:

9 August 2012

“Concerns were raised about the ability of customers who are not online to benefit from
new approaches to tariff presentation and additional support. It was agreed that there
needed to be the same approach for all channels and noted that doorstep sales might
provide another way to engage customers where a customer was not online”
(Source: http://www.eonenergy.com/~/media/PDFs/General-PDFs/Roundtable%20notes_final.pdf) Eon reset meeting – Which? and Consumer focus were present. 26/01/2012

Which? responded to my questioning,
“We agreed [at the reset meeting with Eon Jan 26th 2012] that ‘doorstep sales might provide another way to engage customers where a customer was not online’, which is true, but that doesn’t mean that it is the best way to do so, or that we support it or recommend it. As we’ve made clear often – consumers don’t like doorstep, it has been subject to widespread mis-selling, which is why we are glad that the big six have stopped doing it”

But Eon haven’t stopped doorstep selling at all have they which? Eon?
Eon have pledged to stop “cold calling” and instead will arrange appointments to doorstep sell to people in their homes, or call on people whom have not opted not to receive doorstep visits.

Now read the notes again from the reset meeting that Eon published…
“Concerns were raised about the ability of customers who are not online to benefit from
new approaches to tariff presentation and additional support. It was agreed that there
needed to be the same approach for all channels…”
All channels is the key here – all ways of approaching customers on tariff presentations and additional support – both online and not online there needed to be the same approach.
Then the notes continue…
“…noted that doorstep sales might provide another way to engage customers where a customer was not online”

If the new approaches for tariff presentation and additional support need to be the same across all channels, then this will include “doorstep sales”

This is backed up by the fact that Eon propose to increase numbers of telemarketers, shopping centre/high street staff, etc, in which to arrange appointments so as not to cold call and visit homes that have not opted out of interest in Eon.

Eon will continue with doorstep selling, we are told Which? are opposed to this process.
Which? claim they oppose doorstep selling yet Jenny posts here,
“Re doorstep selling. Which? applauded the moratorium on doorstep selling as it has done so much damage. However, I’m interested to hear your thoughts on whether it is ever acceptable. For people who don’t go online, could a visit from an energy rep be effective in getting a cheaper deal?”
Which? and Eon know full well that doorstep selling goes on today and will continue to do so.

I’ve asked Eon, they refuse to give an answer.
I’ve asked which? who state that they agreed with doorstep selling at the meeting but don’t support or recommend doorstep selling.
Which? also claim that, “we are glad the big six have stopped doing it [doorstep selling]” – when they know full well that Eon doorstep sell now and plan to continue doing it!

Eon, what are these “new approaches for tariff presentations” you mention?
Perhaps Eon would like to answer as to why you doorstep sell today and intend to continue to do so?
Why exactly are Which? telling people that the big six no longer doorstep sell?
Which? you either agree with doorstep selling or you don’t?
You campaign against it on your website but agree with it in private meetings with Eon, what’s going on?

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Pete Moorey says:

10 August 2012

Hi Frugal Ways,

Which? hasn’t campaigned on doorstep selling but supported Consumer Focus’ call for a suspension because of the poor track record of suppliers and the examples of mis-selling.

We have not called for a complete ban as it could be a way of helping some people get on a better deal, as long as it’s done responsibly, hence our comments in the meeting with Eon.

This could include committing to telling people about their cheapest deal, making sure they collect all required information for the purposes of providing an accurate cost comparison, as well as ensuring that no cold calling signs and the like are respected so that people who don’t want to be bothered aren’t.

There would have to be a major change in the way doorstep selling took place with necessary protections in place – only then could it play a role in helping people get on better deals.

Pete Moorey
Energy Campaign Manager, Which?

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frugal ways says:

10 August 2012

Hi Pete,

Which? haven’t “…campaigned on doorstep selling but supported Consumer Focus’ call for a suspension because of the poor track record of suppliers and the examples of mis-selling.

So what exactly are Consumer focus saying about doorstep selling that which? support?
“we call on E.ON to look again at doorstep selling, which it continues to do despite all of its major competitors stopping the practice. If E.ON is serious about listening to customers then it must explain why it is the only one of the Big Six to still sell energy on the doorstep.
•‘We know from our research that customers don’t welcome doorstep selling. It doesn’t offer the best rates and hundreds of thousands of people have been switched to a worse deal. We would always urge people to think twice before buying at the door. You will usually get a better deal by shopping around, and taking time to weigh up all your options before making a final decision.’

Consumer Focus research shows:
•More than nine out of ten people who have bought energy products on the door would never do so again
•Only 4% of people are positive about energy door step sales
•Only 1% of consumers see doorstep sales as a useful way to find out about products
•Only 3% have a positive view of any type of doorstep sales, down from 9% in 2009.
•50% of those who sign up on the door for a product or service, and then changed their mind, signed up because they felt pressurised”
(Source: http://www.consumerfocus.org.uk/news/e-ons-announcement-of-improvements-to-its-direct-debit-policy – 4th April 2012)

Which?’s own polling says the same;
Door-to-door salespeople – what do you think?
I’d rather they didn’t come to my house at all (95%, 958 Votes)
It depends on what they’re selling and how pushy they are (4%, 45 Votes)
I like them – it’s nice to chat face to face (1%, 9 Votes)
Total Voters: 1,010

Which? and Consumer Focus were both present at the Eon meeting in Jan 2012 – BOTH which? and consumer focus agreed with doorstep sales then.

You post… “We have not called for a complete ban as it could be a way of helping some people get on a better deal, as long as it’s done responsibly, hence our comments in the meeting with Eon”
This is at the same time as supporting consumer focus, who say,
“….we would hope this announcement will cause them to end doorstep sales” In response to OFGEM’s investigation of Eon
(source: http://www.consumerfocus.org.uk/news/e-on-must-stop-unwanted-doorstep-sales-given-new-ofgem-investigation – 4th April 2012)

Which? think doorstep selling … “could be a way of helping some people get on a better deal, as long as it’s done responsibly, hence our comments in the meeting with Eon.

This could include committing to telling people about their cheapest deal, making sure they collect all required information for the purposes of providing an accurate cost comparison, as well as ensuring that no cold calling signs and the like are respected so that people who don’t want to be bothered aren’t.”

Let’s look at the facts;
* Research by OFGEM, consumer focus and which? points overwhelmingly towards a dissatisfaction with doorstep selling
* Energy companies have a disgraceful record on doorstep selling, over many years
* Redress for consumers disadvantaged by doorstep miss selling have been almost non existant and action, if ever, has been a long drawn out process

Yet we have two “consumer groups” going into a meeting with one of the big six energy companies and advocating – whether it’s cold calling or by appointment – doorstep selling to people to influence them to change their energy tariff/provider.
After all the opposition in conversations, media interviews, opinion pages, that both Which? and consumer focus have voiced towards doorstep selling, to now agree with it, in a meeting with Eon is laughable.

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frugal ways says:

12 August 2012

It’s not just Eon that are selling in the home… there is talk online that service slot times are being cut over at British gas, but the time will be extended for service engineers, if a sale is involved.

If this is true, it would appear another energy company is hanging consumer groups out to dry.
Which? of all consumer groups, should be able to spot being used as a business marketing tool, I would have thought…

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wavechange says:

TO E.ON

Thanks for your replies to my concerns. Unfortunately, here is another.

I recently received an email from you, including the following:

We like to take a meter reading where we can. This is to help ensure you continue to receive accurate bills and double check your meter is still safe and in working order.

I had my meter read this morning and asked the meter reader if he had checked that my gas and electricity meters are safe. He said no. I have never seen any meter reader do anything other than read the meters.

Can you tell me if meter readers have been trained to check the safety of meters? If not, then may I respectfully suggest that you correct the wording of your emails.

At the time I received the email saying that my meter was due to be read, my online account showed a message that id did not need to be read. I am not concerned about this, but thought it might be worth mentioning in case it causes confusion.

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frugal ways says:

I don’t know why people bother to post on Which? “conversation” boards.

Here we have a national energy company – Eon – marketing about their “reset” campaign to win back the trust of their customers, while at the same time, ignoring legitimate questions from one of their customers.
This takes place on the web boards of a “consumer group” and Which? have nothing to say on the matter?
After all the media comment and posts Which? have made regarding customers not trusting energy companies, do Which? think that Eon’s ignorance is acceptable?

This nonsense is backed up by the same “consumer group” – Which? – supporting consumer focus’ campaign to end doorstep sales, while agreeing with them in private meetings with Eon, as a way of selling/switching to “vulnerable” customers whom are not on the internet.

I thought Which? were supposed to be independant?
I take it from your lack of support in getting answers to my questions from Eon that Which? support Eon’s ignoring of customers.

Disgraceful!

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Patrick Steen says:

Hello Frugal, this Conversation is a debate about energy company profits – we’re not sure whether companies are doing a good enough job to communicate them and we want to hear what consumers think. Eon decided to join the debate to share what they’re doing – it’s then for you to tell them what you think of that.

We can’t force Eon to respond to your comments publicly here on Which? Conversation – if you have particular concerns with Eon it may be better to contact them directly. And just to remind you, we have made an effort to respond to as many of your comments as we can, even though they’re off-topic – see Pete’s comment above.

Also, I’m sure you can understand that we want to hear from all consumers, and we would like Which? Conversation to be a place where everyone feels welcome – your comments are in danger of scaring others away from getting engaged in the debate. We want you to have the freedom to say what you think, but please make sure your future contributions are on-topic (this debate is about energy company profits, not doorstep selling) and are not purposely provocative, harassing or defamatory as per our commenting guidelines, otherwise we may have to remove your comments https://conversation.which.co.uk/commenting-guidelines Thanks.

If you would like to talk further about this please use our contact us form: https://conversation.which.co.uk/contact-us

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wavechange says:

I apologise for being off-topic, Patrick. If you don’t know about an issue it is very easy to get side-tracked into discussing other issues that you can relate to.

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frugal ways says:

This conversation says… “… Energy suppliers often tell us they don’t make a lot of money from selling gas and electricity, but as huge profits are announced, it prompts the question, ‘am I paying a fair price for energy?” not “energy company profits” as you say, although this maybe play a part in it.

Jenny then responded to the first post with “… I have already been contacted by a supplier [I presume this is Eon?] saying they want to talk further about what they should do re profits and trust from customers. Another example that Which? Conversation gets noticed. Any other ideas anyone? Keep them coming in and we will pass them on to the companies”
The supplier contacting Jenny says they want to talk about what they should do re profits and TRUST from customers.
Jenny then asked for “any other ideas?”

Nikki, a Which? member of staff raised the following points;
* Improved customer service
* Taking more money than needed from an account
* Being transparent
Nikki then raised the issue of “switching” and felt she was left in the dark some what and ended by saying, “Show you’re earning your money by letting me know what’s going on. If something takes 2 weeks and a lot of work to do, tell me and help me better understand where my money’s going.”

Fair points I thought, but mostly what Jenny had asked for, other ideas and not about “energy company profits”
Eon then posted about “reset” and asked, “Do we just need to be clearer about how we explain things and give customers more information so that they can check out our explanations?”

Wavechange posted about customers being in credit – direct debits – email addresses instead of website forms – geographical phone numbers, again all fair questions to raise.

I posted about the following;
* Money going missing from a prepay meter
* Customer services promising to test a meter then not being able to do it after 8 weeks – along the same lines as Nikki’s point about if taking 2 weeks then let me know
* On reset and trust, I pointed out that a 6% advertised cut in the media was false, mine was only 5.3%
* Still on reset and trust – I questioned why Which? and consumer focus were agreeing to doorstep selling in a meeting with Eon and pointed out that the link to the notes of the meeting had, for some reason Eon refuse to explain, been adjusted to make finding them harder than it was previously.
I ended the post by questioning why the owner of a website forum business, was considered by Eon, “an expert” on energy matters and customers?

Jenny then responded, asking more questions about doorstep selling and what I and others thought about aspects of it.

I responded by giving a theoretical example and suggested that switching wasn’t the golden arrow it’s perceived to be, which I believe is true.
Which? and other comparison websites do make substantial profits from customers switching the services they use, this is a fact.
I then tried to answer questions that Jenny – a Which? member of staff – asked!
I asked Jenny whom did Which? think was paying for all the “savings” that switching customers were getting?
Is this not a fair question?

Eon responded, but only to wavechange’s questions (none of which were about energy company profits) and completely ignored all of the questions that Jenny and myself had asked.
I questioned Eon’s claims that customers need to build up credit during the summer to pay for winter, it’s been well documented in the media that account credit has been used as an interest free loan and interest made upon them and the fact that Eon are now reverting back to the old policy of paying for what you use, sometimes being in debit sometimes credit, backs this up.

I asked Eon why they don’t pay interest on credit balances like others do?
Fair question?

Wavechange and myself both commented on emails instead of webforms – a webform is not written notification, whereas an email is – why do Which? object to me pointing this out?
Eon did not respond to me, but named wavechange directly and ignored all other questions, mine included.
Wavechange then asked about meter safety and training of meter readers – again nothing to do with energy profits – fair questions though.

Now for your post Patrick
First of all lets be clear, this is not just another forum on another website, Which? tells us they are independent, they have the power to issue super complaints on behalf of ALL consumers. Which? have the ear of MPs regulators, enforcement bodies, big businesses, the media, etc.

Is it not fair comment to question Which?’s approach?
The reason I ask is because as I’ve posted already, Which? don’t seem to be bothered that the majority of questions posted here for Eon, including those of Which? staff, are being completely ignored by this particular energy company.
How can getting involved in the debate be “scaring others” away from debate?

Have I been rude to those posting questions?

“We want you to have the freedom to say what you think, but please make sure your future contributions are on-topic (this debate is about energy company profits, not doorstep selling)”
ALL posters to this thread are off topic, Eon and Jenny asked for other ideas.
You want me to have the freedom to say what I think, then say you may have to remove my comments?

I’ve posted factual accounts of what has happened to my family as a customer of Eon.
I’ve tried to back up what I posted on other ideas with facts.
I’ve asked questions of Eon and Which? as requested.
I don’t believe I’ve harassed any other poster here.

Will Which? comment on why my questions here are being ignored by Eon, who asked for questions in the first place?

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frugal ways says:

“Profits at E.on’s UK operation rose by 23.7 per cent, up by £47million to £245million for the first six months of the year. Using another measure of profits – the figure for earnings before interest and tax – the total rose by 47 per cent to £199million.”
(Source: http://www.thisismoney.co.uk/news/article-2187720/E-ON-energy-giant-urged-cut-bills-UK-profits-rise-30.html)

Wholesale prices are well below their peak and Eon have benefited from the fact it has signed a long-term low-price supply deal with the Russian gas producer Gazprom, Eon confirmed it’s “retail margins” have increased.

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e.on says:

Hi Frugal Ways

Thanks for your comments – and sorry for the delay in replying. I know that we’ve spoken to you about some of the issues with your meter before – sorry that we’ve not been able to help answer your questions. If you have new concerns about your meter then please email my colleagues in our Twelpers team on retuk-twelpers@eonenergy.com and they will be happy to try and help you further.

I’m sorry that you didn’t think that our explanation of our price decrease was clear enough. As you can imagine, it would be difficult to include a detailed breakdown of our price change, covering all regional variations, in one press release but we’ll bear your comment in mind when we have a price announcement in the future and try and make this clearer.

We’ve been listening to our customers and a range of stakeholder groups and experts through our Reset Review and you’ll have seen that we have proposed to end unsolicited selling on the doorstep because we understood that customers didn’t want us to do business with them that way. Our customers have told us though they do want to get face to face advice about energy and we know that many consumer groups think that it is important to get customers thinking about energy, as long as it is done in an appropriate way. That’s why we said that we would look at expanding our venue and events selling team, and we’ve also recently announced that we will open our first E.ON store in Nottingham. This is just a trial though – it’s all about working out what is the best way to talk to customers about energy, which we appreciate will be different for different people.

E.ON

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wavechange says:

I think that most people would agree that no company should be making a lot of profit out of supplying energy, selling water or providing any other essential service. One solution is nationalisation, but without competition there is little incentive to operate efficiently and keep prices down.

I believe that the best way forward is to continue to provide customers with a choice of supplier, and perhaps offer a bigger choice than available at present. Obviously companies need to make a profit to survive, but there is no reason why profits should not be capped for companies involved in providing essential services.

Obviously we need to do something about the commission when customers switch supplier, which has to be paid for by other customers. We also need to deal with companies that entice customers to switch before putting up their prices, but that does not seem as prevalent as with banks etc. that entice people with attractive rates for savings and then give paltry interest at the first opportunity.

In conclusion, I suggest that we maintain competition in energy supply but move towards greater accountability and transparency, regulated profits and close monitoring to ensure that no company is allowed to engage in any practices that will benefit some customers at the expense of others.

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frugal ways says:

Obviously companies need to make a profit to survive, but there is no reason why profits should not be capped for companies involved in providing essential services.
I agree wavechange, but then the costs are increased on the supply side of it.
Most if not all, of the big 6 energy companies, sell the energy to themselves.

If profits are capped, the costs that the energy supplier charges itself for providing itself with energy will go up.
We can’t win.

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wavechange says:

Indeed. It all needs close monitoring and external control because we are all dependent on energy and being able to afford to pay for it.

What frightens me is the number of people pushing for nationalisation. Many adults are too young to remember the inefficiency of our nationalised industries and the reason for privatisation.

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frugal ways says: