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Cowboy On Horse Holding RopeThe usual problems that consumers face when are dealing with suppliers are: Lack of clarity on tariff structures and bills: inaccurate meter readings; lack of communication regarded to contract rollover and renewal letters; complicated paperwork and procedures that the consumer does not understand. Ofgem have reported that one of the most significant factors affecting the way suppliers behave is the fact that ‘The Big Six’ control the majority of energy supply and associated contracts in the UK domestic and non-domestic energy market. The Big Six are of course, British Gas (20 million business and domestic customers), EDF Energy (5.7 million domestic customers), E.ON (5.3 million customers), npower (6.5 million business and domestic customers), Scottish Power (5.2 million customers), SSE (9.6 million customers). Unfortunately there is no end in sight to this unhealthy oligopoly but there are ways of ensuring that your own dealings with these companies ensure you have the maximum choice and opportunities to save money.

Customer Mistrust and Cynicism

Another factor that contributes to the oligopoly and general supplier behaviour is the mistrust and cynicism of customers, both business and domestic, towards exploring the available energy contracts and potentially changing supplier. News reports in the papers and on television potentially contribute to this in their regular stories of scams, mis-selling, price fixing and generally underhanded behaviour of some suppliers or sales agencies saying almost anything to get a sale – there is a pressure to retain customers by whatever means and to ensure that it is made as difficult as legally [and sometimes illegally] possible to change supplier, end contracts or even just find out what options are available to you. Research from Ofgem has found that those who do explore the possibility of changing contract, making savings and generally becoming more efficient are usually those under pressure from financial concerns or are particularly motivated by environmental issues. For many others there is an apathetic view that “things will not change” combined with the complexity of changing supplier.

The biggest single barrier to switching is that the customer must do something to switch – the status quo favours the existing supplier in the energy market much more so than in home or car insurance where providers are chosen annually – Ofgem Report

Supplier Objections to Changing Suppliers

So, you’ve decided you want to explore opportunities to reduce your gas or electricity prices by changing supplier and finding either a long term fixed price contract [which may provide significant savings over the course of the contract against inflation and prices rises] or shorter contracts with more immediate savings. Well, there may be barriers to changing provider – though many of these can be resolved before you start the process by CHECKING YOUR CONTRACT TERMS AND CONDITIONS to ensure that you are able to move suppliers. Torse also recommends you start to make moves towards finding a new supplier because you are able to contact the suppliers directly or use an energy broker to negotiate the contract well before due dates. Some of the reasons you may not be able to change supplier are:

  • You still have a debt with your supplier
  • You are still bound by your contract (i.e. you are on a fixed term deal and the term has not run out).

Your supplier cannot object on the two reasons given above if:

  • You are not signed up to any contract, ie if you are on a deemed contract
  • Your contract has expired and you are not bound by its terms

Your current supplier can also object to the transfer if:

  • The proposed new electricity supplier has not applied to transfer all related meter points at the same time
  • Another supplier asks them to (because that supplier has tried to take over your supply i error)
  • If your supplier does object, they are under licence obligations to tell you this as soon as possible
  • They must also tell you the reason why they have objected
  • How you can dispute this if you think you have a case

How Can I Ensure Smooth Change Of Supplier?

The best way to ensure that you do not run into the above issues is to ensure you know your contract in terms of start and end dates and that you plan in advance – treat the list of objections as your own checklist and guide as to what you should know. You can also challenge a suppliers decision as mentioned. We are obviously keen to promote Torse services, but that aside it does make sense to use a broker such as Torse Ltd when seeking out a new energy contract because:

  • We have the day-in, day-out experience of what is currently happening in the market and a good idea of what will happen in the future
  • We also have no allegiance to one supplier and therefore only provide options on the best of a range of contracts
  • We know when a supplier has a fair reason for not allowing transfer and when they are being disingenuous – we can ensure that only fair reasons stop the transfer
  • We know the pitfalls of the market in great detail and can ensure you avoid them – we ‘jump through the hoops’ for you at the appropriate times so you can get on with your daily business

For more information and sources read the supporting Energy Supplier Behaviour PDF document

Category : Electricity Prices / Energy Companies / Energy Prices / Gas Prices

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