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Tell all; energy companies to come clean

Kit Klarenberg
Written By:
Kit Klarenberg
Posted:
Updated:
23/02/2015

At the weekend, Ofgem announced that major energy suppliers will have to proactively inform customers if their cheapest deals are available under a different brand.

Many of the Big Six have partnered with retailers and other energy suppliers to provide utilities under a separate brand name. For instance, SSE provides M&S Energy’s gas and electricity supplies, and as Your Money reported earlier this month, British Gas customers could cut their bills by an average of £175 by moving to Sainsbury’s Energy – despite the two brands sharing the same supplier.

Since last April, suppliers have been obliged to inform customers whether they could get a better deal with another supplier in an ‘annual statement’, but this has not applied to tariffs offered by partners.

Now, however, any energy supplier engaged in a commercial relationship with a partner “will have to tell customers what their cheapest tariff is, regardless of the brand they use”.

Rachel Fletcher, senior partner at Ofgem, recognised that while selling energy through commercial partners had the potential to increase consumer choice, “it is important that consumers are given the complete picture about all their supplier’s tariffs”. She said the new rules would benefit from consumers, as suppliers would now “have to tell customers what their cheapest deal is, whatever brand it is marketed under.”

The new guidelines are currently in the final draft phase, and are expected to come into effect in July.

The widespread consensus from industry commentators was that the move would have negative implications for Big Six players using separate outlets for their own supplies. “This policy will hurt incumbents who are using separate brands for acquisition,” said Joe Malinowski, founder of TheEnergyShop. “In particular, at the current time British Gas is acquiring a lot of customers under the Sainsbury’s Energy brand.”

 

 


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