Sometimes it’s difficult to know who is the bigger villain of the piece. Is it the nasty, branch closing, product mis-selling, executive bonus obsessed banks or the doorstep bullying, bill hiking energy companies? It’s undoubtedly a close-run thing.
This week, Financial Mail has decided to put the major energy companies under the spotlight. In particular, we report on the cack-handed way they have dealt with the Warm Home Discount Scheme to give low-income households a little protection from ever-rising fuel bills.
While the big six energy companies are relishing huge increases in profit margins, they are not making life easy for those households in the grip of fuel poverty.
Bar a core group of 600,000 pensioners in receipt of pension credit, everyone else who thinks they are eligible will have to apply under the scheme and hope they are high enough up the queue to benefit. It’s a lottery and grotesquely unfair.
With the first payments under the scheme due to be paid at the start of next year, there is still time for the Government – or the weak-kneed regulator Ofgem – to step in and demand that all those eligible for the £120 rebate should receive it.
After all, it’s not as if these energy companies, awash with profits, are suffering the same financial hardships that most households face as they come to grips with a shrinking jobs market, rising taxes and soaring bills.
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As if the mishandling of the scheme was not damning enough, energy companies have come under renewed attack for failing to inform consumers about their cheapest tariffs.
An undercover investigation by consumer champion Which? found that in nearly a third of cases, the six major energy suppliers failed to offer callers details of their cheapest tariff.
Southern Electric came out worst – its telesales staff only mentioned its cheapest tariff in response to three of the 12 calls made by Which? staff. Not far behind was Eon.
Of course, it’s unacceptable that energy sales staff are handing out wrong information to people desperate to protect themselves from escalating bills. But the fault does not lie just at the hands of poorly paid and downtrodden telesales people.
With a galaxy of tariffs to remember – complicated by the fact that charges depend on whether people pay by meter, cheque or direct debit – only a rocket scientist/first-rate actuary would be able to advise on the best energy tariff with any degree of confidence.
British Gas boss Phil Bentley, a defender of the indefensible, should spend a day as a telesales operative. I bet you he would make as many errors as Which? discovered.
Consumer confusion is why Which’s campaign to get energy companies to simplify their tariffs has great merit (you can sign up via which.co.uk). It’s also why Ofgem needs to act on this issue – it is currently working on tariff reform proposals – as a matter of urgency.
And it’s also why tomorrow’s ‘energy summit’ – involving officials from the Department of Energy and Climate Change, energy suppliers and other consumer groups – must not just result in hot air.
It should come out with some recommendations to really help consumers tackle energy issues.
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