A virtual CEO explains why energy profits are on the up

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

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.

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 ?

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

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.

“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….

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

“…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?

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.

“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?

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?

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.

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

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.

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.

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.