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Energy regulator postpones plans to help users stuck on pricey default tariffs

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Written by: Paloma Kubiak
16/05/2017
The energy regulator has put back plans to create a database listing customers who are on their provider's pricey standard tariff.

Following a two-year investigation of the energy market, suppliers were due to be ordered to give regulator Ofgem details of all customers who’ve been on their expensive standard variable tariff for more than three years.

An April 2018 target date was set by the Competition and Markets Authority (CMA) for the database, which would allow rival suppliers to contact customers by letter and offer cheaper and easy-to-access deals based on their actual energy usage.

However, Ofgem confirms the launch of the database has been put on hold. An Ofgem spokesperson, said: “We are committed to developing a remedy that works for consumers and encourages greater consumer engagement. We propose implementing a database remedy when we are sure it is secure, protects customer’s data privacy and benefits consumers.

“We have decided to continue testing variants of the disengaged customer database remedy and therefore we are deferring the April 2018 target national rollout date originally set by the Competition and Markets Authority.”

The move to create a switching database came as the CMA’s investigation of the sector revealed 70% of customers of the ‘big six’ suppliers – British Gas, EDF, E.on, Npower, Scottish Power and SSE – are still on an expensive default standard variable tariff.

By switching to a better deal, it said users could potentially save over £300, but instead the CMA found that customers have been overpaying by £1.4bn a year, showing that competition in the market “isn’t working”.

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