Energy companies still confusing customers who want to switch

13 April 2015

energy bills Switching energy bills is supposed to be getting easier for consumers, so they can get the best deals, but it is clear that this isn't the case as confusing tariffs and poorly presented billing information is stopping too many people from getting a package that is right for them.

So says a report by the CentreForum think-tank, compiled for comparethemarket.com. Of course, a lot of price comparison sites aren't helping either, as they've been helping themselves, rather than you.

Despite Ofgem's efforts, switching rates in the UK have been on the decline because the whole process is just too complicated. The report shows that the biggest problem for energy customers is the "deliberately confusing way that suppliers present information".

Bills are presented in a way that is too complex and tariff descriptions were "buried in cryptic terminology, making like-for-like comparisons extremely difficult".

The report invented a new word, saying that this "confusopoly" is preventing fair and effective competition in the energy market, which of course, is leading everyone into being "ripped off".

CentreForum think that Ofgem's new Tariff Comparison Rate (TCR) should be given the chop or, at least, better communicated, because it could be "misinterpreted as an accurate comparison tool for all consumers" rather than the average customer. They'd also like to see a standardised Tariff Information Label, all put on one singular page, to allow people to make faster, better informed choices about their supplier.

The report's author and associate director for economic policy at CentreForum, Tom Papworth, said: "The obfuscatory way that information is presented by energy companies acts as a significant barrier to switching supplier. Customers frequently complain about receiving too much information and having too much choice, rather than too little. Bills are complex and like-for-like comparisons difficult."

"An overhaul of some of Ofgem's Retail Market Review recommendations as we suggest would therefore clearly benefit consumers."

Comparethemarket head of energy James Padmore said: "The report underlines the fact that the energy market is broken. Consumers struggle to make sense of energy bills and too many remain on uncompetitive tariffs because they are unsure of how to compare deals based on their current usage and expenditure."

"We estimate that if everyone moved to the best energy tariff for them, the 'energy dividend' back into the pockets of UK consumers would be in the region of £4 billion - an indication of the overpayments caused by automatically rolling on to standard tariffs and not reviewing bills. Consumers need to be able to compare tariffs like for like and make informed decisions about the best deal for them. The report we have commissioned clearly shows that, at present, the energy industry falls woefully short of this requirement."

TOPICS:   Utilities

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