Are energy companies making more from you than they should?
01/08/16 The Competition and Markets Authority has recently slammed the energy industry for making too much profit. It reckons that a margin of just 1.25 percent is more than enough.
Roger Witcomb, the chap in charge of the two-year investigation by the CMA, pointed out that all energy companies actually do “is metering and billing. They are not making the stuff.”
Yet the real profits enjoyed by the two biggest suppliers last year were 7 per cent for British Gas and 6.2 per cent for SSE. In fact, the CMA reckons that British consumers on average pay a whopping £1.4bn too much every year for their gas and electricity.
So how do you make sure you’re getting the best possible value from your energy supplier? Essentially, my advice can be boiled down to two strategies… switch it up, or get your voice heard by complaining…
Switching is your protest vote!
The easiest way to tell your utility company you’re not impressed is by voting with your feet. Switching can save you hundreds of pounds. Do be careful, though, and make sure any price comparison site you use is signed up to Ofgem’s Confidence Code, meaning they’ve promised to provide impartial and independent switching data.
Big vs Small
Newer small energy companies such as First Utility or OVO Energy are challenging the dominance of the Big Six on the market by offering temptingly cheap tariff. Be brave and go for one of these if it makes financial sense; guaranteed service standards mean you’ll be guaranteed compensation if something goes wrong (and it’s the supplier’s fault).
Even if you can’t be bothered to go through the hassle of changing supplier, your energy company is obliged to let you know if there’s a cheaper tariff available, so make a phone call or drop them an email and you might be surprised by the results you get.
Complain about it!
At Resolver.co.uk, the main causes of customer complaints about the energy sector that we see are billing and switching issues – but we do believe that energy companies are focused on trying to resolve issues swiftly.
In fact, one of the good things about a well-regulated industry is that there is likely to be a well-organised complaints structure. In the case of energy suppliers, they must stick to watchdog Ofgem’s guaranteed service standards. This means that most energy companies offer a clear complaints procedure (often published on the company’s own website).
If you still can’t solve your problem, you can take your complaint to the Energy Ombudsman, although you’ll need to wait eight weeks, or have reached an official ‘deadlock’ before taking your complaint to the ombudsman.
If you make an Energy Ombudsman complaint, and it is upheld, then the Energy Ombudsman can force the supplier to resolve your issue, apologise or even offer financial compensation if appropriate.