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

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.

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.

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.

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.

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?

“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.

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

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.

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.

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!

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.

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. 🙁

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.

Power companies go by meter readings over a period it doesnt matter how much credit you have also increases in cost of fuel used . Over the past 2 years or more there has been a big expose on the web(and newspapers ) on power companies holding onto your credit for long periods and not repaying you . After all the shouting and bawling investigations were carried out by investigative reporters it turned out various power companies were “making a mint ” out of the extra interest held by them which was put into high yield accounts and ordinary accounts . Trying to get your money back was like asking Ebeneezer Scrooge for a rise this built up to such an extent by the general public both in the newspapers and on other UK based consumer help websites (TP and others ) that survey,s were done on the basis of complaints nationwide . It turned out one was way ahead of the others in bad service by a long chalk it is called Scottish Power , website after website ,newspaper after newspaper all condemned it . Scottish POwer issued a statement saying they were “making changes ” this was several years ago so due to the interest on Which I trundled back through all the websites I visited including TP of whom I have posted on in the past ,also newspaper reviews from 2015 .guess what— SP is Still the worst complained power company in the UK on every website i visited and to be fair I visited more than 10 as well as various newspapers websites . But if that doesnt convince you then — I too had SP as a supplier several years ago and had the same trouble getting credited with money held in excess of usage payments . It was a battle leaving them and I still didnt get all my money back.

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.

Music to my ears Josef .

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

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

Practical philosophy in action there Josef ?

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

The legislative changes will never come about when dealing with a government that is run on political lines that oppose the social welfare of its own citizens as they will be treated as a political philosophy apposing their own big business run government of the country. You only get the government you vote for , giving an occasional sop to the public in an advertising gesture of=look we are “really good guys ” is no different when hated companies make a big show of giving to charity just like the bible comment by Jesus when a rich man sent his servants forth ringing bells and trumpets when going to give to the synagogue . —and NO I am not a “bible thumper ” just using it as an example.

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

Late Extra

“Alms in Secret”…….Matthew 6: 1- 4