Nick Boles MP: is switching painful or painless for you?

When I switched, my account with my existing supplier, Scottish Power, was £304.79 in credit. Retaining £304.79 credit actually contravenes their promises on their web site that they will refund any credit balances over your monthly direct debit charge.
The charges for the final bills come to £45.80, so they owe me £258.99. The final bills which they issued were wrong and stated that I had only £211.85 in credit instead of £258.99. It is now over six weeks since I switched supplier and they have still not refunded a penny.
When I complained, they simply told me what the final meter readings were and what to do if I disputed them. I have never disputed the final meter readings because I took them myself.
They did not address the complaint I actually made.

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Davy Nook says:

I switch providers of utilities, insurance and financial services at the end of each ‘contract’ period.
Incentives are always aimed at new custom not loyalty which provides the profit to pay the incentives.
All providers rely upon the apathy of most customers in not wishing to engage in their dishonourable retention methods but rarely is there a problem if you use the various ‘independent’ switch services and ensure your own quick response to information requests and direct debit authorisations.
Remember to cancel dd to ‘old’ supplier once the last dd is taken.

malcolm r says:

Davy, it’s worth looking at fixed price energy deals before the end of the “contract” period. In many cases now their is no penalty for leaving the contract for a better deal. These can, and do, change with an existing provider two or three times within a 12 month period and the switch to them is pretty well instant. i’ve changed twice in the last year to save around £120.

wavechange says:

Online switching services have charges, which were debated in an earlier Conversation. Which? Switch charges between £15 and £45 and other services up to £60. No-one pays a charge for switching, so the charges are shared by all consumers. That means that those who stay with the same supplier subsidise those who switch regularly.

malcolm r says:

I have advocated that we do not need multiple “commercial” switching services, but that we should have a national one for energy run, say, by Ofgem, that has all suppliers and their tariffs for consumers to make their choice.

You do not have to, nor do you need to, use a comparison site to switch. You can look for the best deal and then go direct to the chosen energy company. Switching tariffs within your existing company does not attract these costs.

wavechange says:

The fact is that those who do use switching services are increasing the costs for those who don’t, including those who are not in a fit state to shop around for the best deal.

I suggest that the costs are paid by those who use these switching services. In the days when it was commonplace to use an insurance broker to find a suitable motor insurance policy, we had to pay for the broker’s services even if they were hidden in the charges for the new insurance.

malcolm r says:

A question to ask is why is there a charge by Which? that is not disclosed. if you look for financial advice the advisor must disclose charges and/or commission. Which?’s advice might be best to tell those switching that there is no charge if they go direct to the energy supplier (presumably?).

However, I’d rather pursue the single comparison site proposal run be Ofgem and not subject to commission.

wavechange says:

Perhaps Which? will explain why the charges for using Which? Switch can vary between £15 and £45.

Why is the user of this or other switching service not charged directly? I assume that the costs are passed on to all customers of the company concerned. If I wanted to switch supplier once or twice a year using switching services, I would be subsidised by existing customers of the companies I switched to. That does not seem very fair, does it?

malcolm r says:

“Why is the user of this or other switching service not charged directly?”. I am not disagreeing with that, but the point I was making was where, when you use Which?’s site for example, is the “fee” they receive disclosed? Many may then take the view that we seem to share, and decide to avoid the fee by doing it direct with the supplier.

Is this a “sneaky fee”?

Of course, if you switch to a cheaper tariff this is likely to lead to other consumers paying more anyway – the energy company will seek to maintain its margin. So more sensible tariffs would avoid the need to switch to a “cheaper” fixed price tariff with your existing supplier, leaving your choice then to switch to a more competitive supplier. I’m sure we would not disagree with that option – providing no intermediary’s charging a “fee” was involved.

I remain concerned that Which? operates a substantial part of its business on a commercial basis – switching fees, selling “best buy” status, mortgages (running at a substantial loss apparently – surely money better spent on testing), the notorious huge loss in India, and a large bonus pot. Maybe all contribute to something of a conflict of interests?

The moderators may see this as off topic and I am happy for them to remove it if that were the case.

Lauren Deitz says:

Hi Wavechange and Malcolm,

Apologies for the delay in getting back to you on this. To clarify, there is no cost involved for consumers using Which? Switch. The £15 and £45 figure relates to the flat commission that we receive when a customer switches energy suppliers through our service. The level of commission makes no difference to where the results appear in our tables, and any profits are put back into our campaigns and free advice for all UK customers. More information about how Which? Switch works can be found here: http://switch.which.co.uk/about-switch/index.html

wavechange says:

Thanks Lauren – My concern is that is that the costs of using switching services are, it appears, borne by all customers. I used Which? Switch recently to move from Scottish Power to Ovo and no-one has informed me of the cost of switching. I would like to know what charge was made – either from Which? Switch or the new energy supplier.

At a time when some are unable to afford to heat their homes adequately, it concerns me that everyone has to pay a share of the cost of others switching their energy supplier, which some do frequently. I appreciate that there are costs associated with switching car insurance etc. but that is less likely to affect the poorest members of the community.

Now report on how my switch went. Scottish Power did not even register that I was leaving and took a further direct debit payment, which was not necessary to clear my account. It is possible that they had not been told that I was leaving, but I have no way of knowing. Then SP divided my account into gas and electricity and issued a refund cheque for one but not the other, so I will have to chase them about this.

wavechange says:

9 January 2016

I rang Scottish Power and they agreed that they had made a mistake, and I will be sent a cheque within two weeks. I must check the statements in case there are any other mistakes.

When I was speaking to SP I asked why I had once had my direct debit raised by 40%, despite being in credit, without being informed by email. It seems that customers are expected to check the website regularly, which I did and that my new supplier won’t send emails either. I don’t know if this is the case, but I’m sure that I did get notification of increases in direct debits when I was with e.on.

John Ward says:

E.On still do keep their customers informed. Although they might not be the absolute cheapest, I think their customer service and information provision make up for that. They are a bit too driven by the algorithms of their billing system perhaps – they have just remitted to me a credit balance of £70 but told me they have to raise the monthly DD from £77 to £91 from 01:02:16. I would have preferred a more balanced transition!

Beryl says:

Wavechange, the first thing I did when switching was to write to my bank and cancel all DD payments in favour of SP with immediate effect, which they did without delay. The credit balance I had with SP was then used up during the 6 weeks transitional period, leaving me owing them £25.00 which I duly paid upon completion.

I am so far very happy with Ovo because I am at liberty to increase or decrease my monthly DD payments immediately online and also to top up payments if my energy usage increases. They also send periodic emails to ask you to check that your payment details are still correct and there has been no banking discrepancies.

In return they do expect prompt monthly meter readings, usually on the day before your DD payment is due, which enables them to give an up to date and accurate account of your usage. Its then up to the customer to inaugurate any necessary changes. You will receive an email reminder about 7 days before it is due. This allows customers to keep a reasonable credit balance by putting the control back into their hands.

malcolm r says:

Which? Switch provides an excellent service that I have used a number of times. Clearly it costs money to operate. Even without such a service, simply switching from one supplier to another independently will cost each of them money – one for closing your account and the other for setting up a new one. So nothing will be without cost.

I would ideally like to see a national independent switching service operated without commission and registering every available deal. I see no need for commercial switching sites then. Each of us just needs to find the deal that suits us best, so why do we need more than one?

This is a tongue-in-cheek remark – a little prompted by disgruntlement. Which? needs all the extra income it can get to make up nearly £25 million of losses in its ill-fated India venture and supporting the currently loss making mortgage service. This would have, in my view, been much better spent on helping UK consumers through research and testing. 🙁

wavechange says:

You are right, John. Most of my calls to e.on were because they had informed me about the forthcoming increase in my direct debit when I was already in credit, sometimes by hundreds of pounds. Staff at e.on customer service were polite and helpful and always acted on my requests, sometimes saying that they did not understand why my payments were being increased.

I switched because there was a collective switching scheme organised by the local Council and Scottish Power was chosen as provider. I never had reason to contact Scottish Power because of an excessive credit balance, but I do think they should send an automated email to say when they intend to raise the direct debit.

I’m surprised that e.on has refunded a credit balance of less than £100.

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John Ward says:

So was I – it was unsolicited and I was not given the option to carry it forward. E.On’s system is, in my opinion, a bit too sensitive to the ups and downs of seasonal consumption so my DD payment profile over three years must look like a roller coaster as they constantly attempt to end the supply year at a neutral balanced position.

Fixed-rate tariffs have not been such a good thing over the last two years but that is the gamble you take when you sign up for them. Energy prices could so easily have gone the other way. Looking forward and knowing what they do about trends in the energy market, energy companies seem to be pricing the next round of fixed-rate tariffs at even higher levels than the expired tariffs. That’s one explanation; the other is that they are building in more profit padding.

JosefKafka says:

”Western civilization – a good idea.” [Mis-attributed to Gandhiji ] and we have to be shopping around at every verse end to make sure that we are getting a reasonable deal for the ESSENTIALS for a civilized and healthy life on this wet, windy and cold-ish island.
And we have the : time; facilities; skills; eyesight; … to undertake this Sisyphean task – Of course we do !
Gas; Electricity; Water; Telephone (Non-Cell) should be by Default, supplied as of right at the lowest, nationally recognized, tariff, to everyone who is connected to the ”mains”. [Yes, there would have to be special considerations for Prepayment, etc.]
Then, and only then, should the BUSINESSES seeking to make even more profit, from what used to be OUR=Services, be able to flood us with their special offers for higher cost options.
Never mind about all the flim-flam of shopping around, let’s STOP these rip offs, and stop them NOW !

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JosefKafka says:

Unfortunately not to the ears of many of the PLP (Parliamentary Labour Party) – however to 10s of 1 000s of their members, and 1 000 000s of the rest of us, DL (I I M = If I May).
Regards

DeeKay says:

The essentials should never have been privatised
I dont care how much it was supposed to be taking to run them we should have kept them
Like NHS. My own Doc clearly tells me that if the managers who are 10 fold since Maggie were kicked out we’d be back a lot better off
And those thoughts are from a lifetime Conservative!!!!
One does have to toe the party line
One does not have to be brainwashed
One has a brain

malcolm r says:

I find a difficulty when politics and such enter these conversations as if one size should fit all. Some policies and beliefs from each side of the political spectrum may be acceptable, but not all. Ideally I would like to see all people represented by those who should be managing our country. Why do we have to have parties that bang on about supporting the wealth makers, or supporting the working class, for example when our country is made up of all these, plus a lot more – the students, elderly, middle class, families, single people………they all should be considered. I don’t want a partisan government of any colour.

Similarly between capitalism and socialism – parts of each have their place, but not just one or the other. The problem is both sorting out the best bits of each and of course getting agreement from the populace as to what they are. That can never happen in totality because we all have diverse attitudes, cultures, skills, motivation. You can simply never dictate who is right and who is not; no one should be in that position.

Where is a solution that works for the large majority in energy?
Energy supply must, in my view, be a compromise based on the real cost of supply, sufficient margin to enable the participants to invest and operate successfully, with those genuinely in need supported by a social care system operated by the state.

Ian says:

Good points and well stated.

JosefKafka says:

malcolm r
‘fraid that your first two cliche rich paragraphs were so tightly argued that it was only when you got to the practicalities that I found myself, Scarecrow Oz like, able to comprehend and agree with you.
May I explain, please ?
”Are you sitting comfortably? Then I’ll begin.”
M R ….”Where is a solution that works for the large majority in energy?”
J K….. Our good friend Utilitarianism, the Benthamite equation of Pleasure minus Pain = Utility, subsequently modified by John Stuart Mill who wanted us to feel the quality as well as the width. Hurray for that, say I

M R ….. Energy supply must, in my view, be a compromise based on the real cost of supply, sufficient margin to enable the participants to invest and operate successfully, with those genuinely in need supported by a social care system operated by the state.

J K ….. Hurray, again.
Away with present day Crony Capitalizm, where taxpayers provide the investment to :
** Build nuclear power stations;
** Lay supply links to hard to reach consumers;
** Construct vaste buffer reservoirs for oil and gas;
** Carve high-speed railway lines [So that City State London can suck in more Singapore style Day Workers from far flung dormitories.]

And having provided, hand over, so that the next part of your ”Modest Proposal” can come to pass – that certain elements will legitimately be able to hold the citizens of this country, we taxpayers, to ransom over the supply of the Bare Necessities, the FunDaMentals for Life In a Cold Climate.

To make profits enough to pay £10s of millions to Chief officers;
To export surpluses, via their Sovereign Wealth Fund holdings, to subsidize their lower cost, nationalized necessities.

Hurrah, thrice times Hurrah, for your Brave New World, where we, like John Savage, can swing ”Slowly, very slowly, like (an) unhurried compass needle … north, north-east, east, south-east, south, south-south-west; then pause, and, after a few seconds … ”
.

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JosefKafka says:

Thnx, D L.
My thought is that politics is the ”Armed wing” of philosophy.
It’s superb to have deep and profound thoughts and conclusions about a whole range of matters, which now and again I do.
However in so many cases it needs legislation to start the ball rolling on even the seemingly most obvious changes in society.
From Slavery ….. To Seatbelts
From Crash helmets ….. To CO2

Regards

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JosefKafka says:

We are in close agreement again, D L.
Your point about the role of Conspicuous giving to Charity has paid great dividends in UK Gongs awarded over the last few years.
I also am not a botherer of the gods, I have this non-aggression pact with them. If you leave me alone, I’ll stop sacrificing past their sell by date things to you, and leaving them tied to lamp posts to rot.
I also, also, (sic) find lots of worth to quote from the bible – surprizing how many Xtians seemingly have never read it. Where is your particular quotation from, please – it’s GREAT !

Josef

JosefKafka says:

Late Extra

“Alms in Secret”…….Matthew 6: 1- 4

Richard says:

There are still hundreds of thousands of people on old, so-called preserved tariffs, often with a time clock attached. It seems to be virtually impossible to move from these, as other electricity companies won’t accept them. Originally these tariffs were meant to be cheaper, but now they are more expensive and only seem to creep up in price.
In my mother’s case in London, this off-peak tariff is now 2p/unit more expensive than SSE’s fixed price deal. As she is reliant on storage heaters, this is a substantial cost now.
The profit on these captive customers must surely be excessive. And these customers are likely to be low-income.
Can more be done for these customers?

davidinnotts says:

Richard, this illustrates one of the points about special deal fixed tariffs.

Back, say, 4 years ago when fuel prices were higher, a 5-year tariff might offer a 1% surcharge over the standard rate at the time, with a promise that this rate was fixed for 5 years. As we were then expecting rates to go up, that sounded good – by 2016 there would have been a great saving over the 2016 expected price. But, as it turned out, prices unexpectedly dropped, so those fixed-rate tariffs were not such a good buy.

What you are asking is that companies must honour the bargain if prices rise, but the customer can break the bargain by exiting or getting a lower rate, if the price goes down. This doesn’t sound fair. Signing up to such a contract is always a gamble; compare this with betting at the races: “I want £1000 on ‘Stumbler’ at 20:1, but if it doesn’t win, I insist on getting my money back”. It doesn’t work that way in real life. The companies offering such deals were charging more at the outset, expecting prices not to rise too much so it would even out over the 5 years. The customers were hoping to have a great deal if prices rose a lot, as they had been doing. No-one was being cheated; so it IS fair to keep to the bargain made, even if it’s costing more now. If I was on such a tariff I wouldn’t be happy now, but the deal WAS fair. I’d love a way out, but that would be a gift from the supplier, and at the expense of other customers, at that.

This is the ‘time clock’ issue. So now, if you’re offered a one-year fixed tariff (recommended right now by Which?) and the price of fuels drops steeply in 6 months time, would you want to cancel the contract and make the supplier bale you out? Probably, from what you say. But if the price rose steeply instead, would you want the supplier to cancel the contract and put you on standard tariff or another of your choice? Of course not – you’d scream blue murder and want to keep them to their promise! Be fair. If you want a tariff with a get-out clause on your side only, search for one. But there won’t be any: it would be a crazy thing for a supplier to do!

malcolm r says:

David, there are deals like this. In fact I think most fixed price deals now have no penalties for cancellation so it is all in the customer’s favour. I have a 1 year deal that so far I have changed twice as the new “fixed price deal” came on the market.

However, whilst I use them for my benefit I believe they should be scrapped. They are subsidised by the many “sticky” consumers who choose not to move from standard tariffs. Elsewhere above I have proposed just having a choice of essentially standard-type tariffs that depend on your consumption and basic times of use.

davidinnotts says:

Thank you.Malcolm.

JosefKafka says:

Whilst I agree with the general thrust of your argument, I do think that your claim that there are :
” .. consumers who choose not to move from standard tariffs … ”
might be in need of some finessing in the light of research from organizations such as Age UK.
Would you not agree?

JosefKafka says:

Thnx for this contribution which goes towards confirming my view that there are some in this rich company, Ooops, country of ours who ”Know the price of everything and the value of nothing.” – not even human life.
That in a civilized society, [which trumpets its Democratic values to the world thru’ the barrel of a gun, or threat of nuclear destruction], should even THINK about having the life preserving essential utilities in the hands of profit hungry spivs was ever so slight a puzzle to me.
However your contribution has confirmed that supporters of such regimes are alive, ‘well’, and walking amongst us in human form.
My DEEPEST thnx.

JosefKafka says:

GOOD news ‘folks’, now so many of us are ”Self employed” and spending so much time at home scavenging the employment market for our next quid or two, we can maximize the efficiency of what income we are able to glean by filling our idle moments by playing the
Essential Utilities Cost Minimization game.
Back to the good old days of Hunter Gathering
I knew all this co-operative agriculturalizm wouldn’t last –
” La cigale et la fourmi ”
Too many cigales, and not enough fourmis.

malcolm r says: