‘We welcome the move by E.ON to change its Direct Debit policy. It is a victory for common sense and hopefully the first of many steps the company will take in its Reset Review programme to improve the experience of its customers.  

‘With this in mind we call on E.ON to look again at doorstep selling, which it continues to do despite all of its major competitors stopping the practice. If E.ON is serious about listening to customers then it must explain why it is the only one of the Big Six to still sell energy on the doorstep.

• ‘We know from our research that customers don’t welcome doorstep selling. It doesn’t offer the best rates and hundreds of thousands of people have been switched to a worse deal. We would always urge people to think twice before buying at the door. You will usually get a better deal by shopping around, and taking time to weigh up all your options before making a final decision.’ 

FACTFILE: 

Consumer Focus research shows:

• More than nine out of ten people who have bought energy products on the door would never do so again
• Only 4% of people are positive about energy door step sales
• Only 1% of consumers see doorstep sales as a useful way to find out about products
• Only 3% have a positive view of any type of doorstep sales, down from 9% in 2009.
• 50% of those who sign up on the door for a product or service, and then changed their mind, signed up because they felt pressurised
• 79% of customers would prefer prior appointments agreed before a sales visit 

‘It’s good news that customers are getting faster broadband speeds. But there is still often a very clear gap between the maximum speeds advertised by suppliers and what people actually receive. People don’t expect to pay for what is advertised as a fast lane service and get a slow lane delivery. 

‘Customers expect products to do what they say on the tin. It is disappointing that broadband suppliers are still using advertising that can mislead customers. We hope that new rules from the regulator coming into effect in April will tackle this and that enforcement action will be taken against any company which isn’t upfront and honest.’

ENDS

Notes to editors:

• The most commonly-experienced problem in the internet market is broadband speed being slower than expected, with 30% of internet users experiencing this.  Source: The Consumer Experience. Research Report, Ofcom, December 2011, p.137.

‘It is welcome that the Government has clarified that customers have a choice over whether they have a smart meter or not. Smart meters have big potential benefits, such as helping customers to cut their energy use and ending estimated bills. But there are also potential concerns which must be addressed. 

‘The energy industry and Government must win over the hearts and minds of customers if they can opt-out of having a smart meter.¹ This clarification should be a wake-up call for suppliers to genuinely put customers at the heart of their rollout plans, if they are to succeed. People need to know that the concerns they have, for example over data-privacy, are addressed, so the benefits are seen as valuable enough to make this change. 

‘It is important that customers with concerns should be able to choose to have a smart meter and access the benefits that come with it, but have options to control what data they share. Consumers will also need to know if they will have to pay more to have a traditional meter as is the case in other countries.’

ENDS 

Notes to editors: 

• DECC has confirmed that energy suppliers will continue be required to rollout meters by 2019. But they won’t be able to require customers to accept installation of a smart meter.

• Energy news
• Post news
• What consumers think of online public services
• Downsides to digital
• What’s new from Consumer Focus – our latest research
• Behaviour change and CSR conference

The Government has yet to announce its decisions regarding the reform of the consumer landscape, including the future of Consumer Focus. In the meantime, we’re still developing our workplan for 2012/13. Your views are important to us to help us concentrate on those areas where we can make the most positive impact for consumers. We are grateful to everyone who takes the time to share those views with us by 1 March.

Don’t forget, if you want to keep up to date with all our news as it happens you can follow us on Twitter.

Energy news

• Consumer Focus has identified a £30 million underspend on the Warm Front scheme. A lack of marketing and tightening of eligibility criteria mean that the poorest consumers are not applying for the scheme which gives heating and insulation improvements to households on low incomes. We are urging people on income-related benefits and living in homes that are poorly insulated or do not have a working central heating system to apply for the scheme by calling the helpline on 0800 316 6004 or by visiting the Directgov website  
• All of the ‘big six’ energy companies have put their prices down in response to falling wholesale prices. We hope this shows suppliers are waking up to the need for customers to see rapid cuts when wholesale prices are low and that this trend will continue if wholesale costs carry on falling
• The Government has decided to appeal to the supreme court following the ruling that its consultation on cuts to the feed-in tariff (FiT) was unlawful. The Government will no longer be able to cut the higher rate (43.3p per kilowatt-hour) paid to FiT consumers from 12 December, as long as their solar panels are installed and registered by 3 March. We urge people to calculate the potential benefits to them on the basis of the lower rate (21p per kilowatt-hour), so they don’t end up with a lower return than they expected if the Government’s appeal is successful. Read the Keeping FiT blog
• What do energy consumers face in 2012? Will energy prices rises or fall? How many consumers will be using smart meters by the end of 2012? We predict a greater focus on new energy-efficient products and services, but will vulnerable consumers be left in the cold? Read more about our energy predictions for 2012 on our blog
• Big Energy Week last week saw consumer organisations, energy suppliers, switching sites and government agencies working together to give advice to consumers struggling with their energy bills. According to Government figures one in four homes don’t have enough loft or cavity wall insulation. Our research shows that millions of people would benefit from insulation and switching tariff or payment type. We want consumers to contact their suppliers to find out more.
  Useful phone numbers:
  British Gas – 0800 980 8177
  E.ON – 0800 479 0162
  EDF Energy – 0800 096 9966
  npower – 0800 02 22 20
  ScottishPower – 0845 2 700 700
  SSE – 0800 072 7201
  Home Heat Helpline – 0800 336699
  Energy Saving Trust – 0800 512 012

Post news

Edward Davey, Minister for Employment Relations, Consumer and Postal Affairs, recently announced that Royal Mail and the Post Office have agreed a commercial arrangement. This is good news for consumers as it gives security to the Post Office network over the next 10 years.

We hope the Post Office will broaden it range of services and provide them in the most convenient way for consumers. Mail plays an important role in Post Office revenue and we believe that banking and government services are its future.

Our research:
Counter measures: Delivering access to current accounts for all at the post office
Opportunity knocks: Providing alternative banking solutions for low-income consumers at the Post Office

Online public services – do they measure up?

What really matters to consumers when it comes to online public services? You can now fill in your tax return online, find out information about local government services, apply for a passport, and in some trial areas you can even access your health records online. But with the Government moving towards ‘digital by default’ for public services, do these online services meet consumers’ needs? 

Our new interactive website and report ask the question: what do consumers want, need and expect from online public services?

The internet and new technologies have made powerful new approaches to consumer empowerment possible. Most people would probably say that these new technologies have brought significant benefits. However, there can be downsides too – we are investigating and would like as many people as possible to have their say on the issues.

We’ve put a draft research project on our website to give you an introduction to the situation.

Filling the gaps
We found that the Government’s energy efficiency assessment method will never recommend cavity wall insulation for homes built after 1983, despite up to 2.3 million homes being built after this date with unfilled cavity walls.

We think that consumers seeking Green Deal advice should be able to consider the option of cavity wall insulation. Consumers may wrongly assume that their cavity walls are insulated. If insulation is never recommended, consumers will never be able to use Green Deal finance to pay for the work.

In this report we ask the Government to take swift action to make changes to the way energy efficiency assessments treat cavity wall insulation. These changes could help households cut their heating bills and save up to 600,000 tonnes of carbon each year.

The NSMC behaviour change and CSR academy and conference

26–29 March
15Hatfields London

This event is being held in direct response to a growing awareness of the role of business in influencing society’s behaviour, and companies’ focus on the impact of their business on society.  

The four-day event will examine the role social marketing has in helping businesses to improve the benefits they offer to their shareholders and to society.

26–27 March: The academy, accredited by the Chartered Institute of Marketing, will train delegates in the process of planning, implementing and evaluating social marketing programmes.

28–29 March: The conference has attracted speakers from around the world. They will discuss the role of business in influencing society’s behaviour and how social marketing can be used to increase the effectiveness of corporate social responsibility (CSR) programmes.

For more information visit The NSMC’s website.

‘This is a once in a generation opportunity to reform our financial regulation and it is vital we get it right. Consumers have been losing out for too long. It is important that the Bill ensures that all of the regulatory bodies are clear on their responsibilities and powers from the offset. 

‘Particularly welcome steps include early interventions on banning products. This should help stop many of the issues which have been endemic in this market in recent years. Transferring responsibility for credit over to the FCA is also a good common sense move.

‘The clarity of the FCA objectives on promoting competition is significant. Competition is not an end in itself, it must deliver benefits for consumers. The detail in the Bill gives some hope that this has been recognised and the new regime will work towards promoting effective competition to make sure consumers get a better deal.’

‘Consumers want certainty on what to expect when they sign up for solar panels, or any other energy efficiency programme.  An ongoing legal battle would be likely to undermine consumer confidence so we’d urge the Government to draw a line under this judgement to prevent any further uncertainty.  

‘The Government needs to balance incentivising consumers to take up renewable energy with protecting bill-payers from the rising costs of this scheme. But the speed of the December deadline would unfairly leave some consumers getting a lower return than they bargained for.  

‘If consumers choose to install solar panels before 3 March they may qualify for the higher tariff-rate. But we would urge people to calculate the potential benefits to them on the basis of the lower rate proposed by Government, so they don’t end up with a lower return than they expected. It is worth being aware that it takes four weeks on average for installation and registration, and paperwork delays and bad weather could also add on extra time.’ 

ENDS 

Notes to editors:

1. A recent Consumer Focus report shows a high overall level of satisfaction among consumers who have taken up the Feed-In Tariff scheme. However it also shows some concerns about misleading sales practices, a lack of adequate information from some solar panel installers, and difficulties with the registration and payment process for the tariff itself. Please see the report - ‘Keeping FiT’- and the press release for more detail

The Warm Front scheme – which offers heating and insulation improvements to households living on low incomes – is expected to see up to a fifth of its £143 million worth of funding for this year going unclaimed.¹ This money could help up to 16,000 households struggling to afford their energy bills to cut their costs by a potential £650 per year.

Warm Front has seen a dramatic decline in applications for help this year. In April to December 2011 less than 40,000 people applied for a Warm Front grant compared to over 130,000 applications in the same period in 2010. The scheme was oversubscribed in 2010 but the funding was cut by almost two thirds this year.² 

A combination of factors are likely to have led to this fall in applications. The eligibility criteria were made stricter and the Government did not advertise the scheme as it was anticipated demand would again exceed supply. The milder winter weather may mean not as many people have been driven towards the scheme, but it is also seems that the number of advice organisations referring people to the scheme must have dropped significantly. They are likely to have been concerned people would end up not getting the grant given eligibility restrictions and the much smaller funding pot. 

Consumer Focus and National Energy Action are urging people to put in a claim now before the funding for this year ends on 31 March. People on certain income-related benefits and living in homes that are poorly insulated or do not have a working central heating system are eligible for Warm Front grants. Anyone who is eligible for Cold Weather Payments can claim the grant such as: older people receiving pension credit; families with a child under five and in receipt of Income Support, Income Related Employment and Support Allowance or income based Jobseeker’s Allowance; and people with higher rate disability premiums. 

Audrey Gallacher, Director of Energy at Consumer Focus, said:

‘The poorest pensioners and families will have been hit particularly hard by high energy prices. Many are living in cold homes, which could put their health at risk. It is very disappointing that people who need Warm Front help to make their homes warmer and cheaper to heat are likely to miss out. We’d urge anyone who thinks they may be eligible to put in a claim. This help is free and can make a big difference in affording your energy bills and keeping warm and well.’

Jenny Saunders, Chief Executive of National Energy Action, said:

‘The best way to protect yourself from high energy bills is by making your home more energy efficient through insulating the loft and walls. The Warm Front Scheme is there to help if you are living in an un-insulated property and receive certain benefits. It can also provide a new boiler if yours is broken down. Please come forward and find out what might be available free of charge as soon as possible before the funding is withdrawn.’ 

Full details of who can claim help under the Warm Front scheme and how to apply are available on Directgov – www.direct.gov.uk/warmfront People can apply for the scheme online, by post, or by phone on 0800 316 6004 (or textphone 0800 072 0156),Monday to Friday 8.00 am to 6.00 pm and Saturday 9.00 am to 5.00 pm.

Factfile: 

• There are now likely to be almost 7 million households living in fuel poverty in the UK (Estimates on behalf of Consumer Focus using Centre for Sustainable Energy research). This is up from 5.5 million in 2009 (the latest official Government figures)
   
• The average energy bill is now £1,289, which will fall to £1,258 after all the recent price cuts announced come into effect 

ENDS

 Notes to editors: 

• Warm Front is the only UK Government funded scheme to tackle fuel poverty and improve energy efficiency. The Warm Front Grant applies in England only.  

1. The total budget of £143m consists of £110m allocated to Warm Front and associated activities secured through the Spending Review 2010. Of this, £108m was directly allocated to Warm Front. In addition DECC allocated £25m to support the completion of outstanding work from 2010/11 with a further £10m allocated to Warm Front in 2011/12 from the Department of Health.
    
2. Funding for the Warm Front scheme in 2010-11 was £366m – almost three times the level of funding for this year 2011-12.  

Breakdown of regional Warm Front applications:  

‘We welcome this announcement by Edward Davey –  a ten year deal is good news.  An agreement of this duration is important to support the long term sustainability of the network and the viability of Post Office Limited after it splits off from the Royal Mail Group. Mail accounts for one third of post office revenues and therefore is a key part of the jigsaw in maintaining a strong and healthy post office delivering those services that consumers expect. This deal helps provide firm foundations for the post office network’s future. 

‘Over the next few years there is the opportunity to build on this arrangement by ensuring that post offices deliver the widest range of services in the most convenient ways, while at the same time broadening the range of services available from the network. The fact is that the post office is changing – banking and Government services are its future.  

‘The coming years will see major changes to the post office branch network – these changes need to work for consumers and ensure the network can offer and benefit from the new product areas.  If the range of products, the quality of service and the ease of access can be delivered then post offices will continue to play a unique and vital role for consumers, businesses and the wider society.’

The call comes during Big Energy Week, as millions of people are missing out on easy ways to make big savings for little or no cost. Taking advantage of free or discounted loft and cavity wall insulation offered by energy suppliers can save consumers an average £120 off their bill every year and switching to direct debit alone could save around a further £100 each year.¹

Updated Government figures show that 9.6 million homes don’t have enough loft insulation and 7.8 million do not have enough cavity wall insulation – that’s one in every four homes.² Every major supplier is offering free or cut price deals for loft and cavity wall insulation, yet not enough people are claiming these deals. Currently 100,000 households are taking up these deals each month when some 200,000 households could be taking advantage of them.

New Consumer Focus research³ also shows that millions of people would benefit from insulation and switching tariff or payment type, as the majority of consumers don’t think their home is as energy efficient as it could be or that they are on the cheapest deal. Key findings of the Consumer Focus research show that:

• Two-thirds of consumers are not fully confident that their home is as energy efficient as it could be. Yet seven out of 10 of these consumers don’t plan to do anything to improve the energy efficiency of their home in the next year
• Almost half (47%) of consumers don’t know how thick the insulation in their loft is – so they don’t know whether it should be improved
• Over a third (35%) are unaware that suppliers offer free or discounted insulation which anyone can claim, and that the scheme is paid for out of customers’ bills.
• Two- thirds of consumers see paying around a £200 one-off fee for home insulation as a good investment as it will save at least £100 off their bill every year
• Only one in five people are fully confident that they are on the best deal that their energy supplier offers

Mike O’Connor, Chief Executive of Consumer Focus, said:

‘Millions of consumers are finding it hard to afford higher energy bills and every penny that can be saved counts. Yet many people are paying more than they need to because their home is leaking heat and they aren’t on the cheapest deal. Yet with one simple call to their energy firm many customers could make big savings on their bill.

 ‘Changing to a cheaper tariff or payment type can cut your costs. Many people also don’t realise that energy companies offer free or discounted insulation –and it’s a waste not to take advantage of these offers which could shave well over £100 off your bill every year.’

 Christine McGourty, Director at Energy UK, said:

‘Energy companies offer a wide range of help and advice and we’re urging people to get in touch with them and make sure they’re not missing out. By taking advantage of the offers of free or subsidised insulation, you can help keep your house warm for less. Big Energy Week is a great opportunity to see what simple steps you can take that could make a big difference. We know household budgets are stretched, but the companies are working hard to provide customers with the help they need, so don’t hesitate to ask.’

 The six major energy firms have made a commitment to help customers find out more about insulating their homes and whether they are on the best deal their supplier offers.⁴ If you call your supplier and ask about ways to save money, now they should alert you to free and discounted insulation deals they offer, the availability of cheaper deals, or both. This is a welcome move as almost seven out of 10 people surveyed by Consumer Focus said they would be likely to switch tariff or payment type if their supplier told them they could be on a cheaper deal.

 Energy customers can speak directly to their energy firm about the free or discounted insulation and other energy efficiency measures they may be able to offer you under the CERT scheme, and to find out if they could be on a cheaper tariff or payment type. The contact details for each supplier are below.⁵

British Gas – 0800 980 8177
E.ON – 0800 479 0162
EDF Energy – 0800 096 9966
npower – 0800 02 22 20
ScottishPower – 0845 2 700 700
SSE – 0800 072 7201

 People can also contact the Home Heat Helpline on 0800 336699 or Energy Saving Trust on 0800 512 012 for advice on saving energy and grants and schemes available to help make your home warmer and save you money.

 Factfile:

• Consumer Focus research shows one in six people plan to only heat half, or fewer, of the rooms in their house this winter. One in 20 people will only be heating one or two rooms, rising to one in 10 of those in the poorest social group.
• Research by Citizens Advice shows 43% of people are worried they can’t afford their next fuel bill and one in two say energy bills will put a strain on their finances this year

 ENDS

Notes to editors:

 In Big Energy Week, 16 – 21 Jan 2012, charities, consumer groups, energy companies, switching sites, Ofgem and the Government are working together to give practical advice to people across the country to help them spend less on heating and powering their home. Advice events are being run in locations across the country. Find out more about Big Energy Week and what’s happening in your area at www.bigenergyweek.org.uk or pick up a leaflet from your local Citizens Advice Bureau.

1. Switching to a different payment method can make big savings – you could save the most money by paying by Direct Debit, or moving to an online or dual fuel tariff. Monthly direct debit is on average £100 cheaper per year than paying by cash or cheque.
2. DECC figures show that 13.7 million homes (59% of those with lofts) have adequate loft insulation, 9.5 million (41%) homes still need it. 11.0 million homes (59% of those with cavities) have adequate cavity wall insulation, 7.6m (41%) still need it. Suppliers collectively need to almost double their average monthly rate of professionally installed insulation if they are to comply with targets – from just over 100,000 installs a month to some 200,000. The Government estimates up to 2 million free or discounted insulation measures could be offered by energy suppliers in 2012.      
3. Omnibus research was carried out by TNS Omnibus on behalf of Consumer Focus on a face to face basis. The polling was carried out in November 2011 with 1166 adults across Great Britain.
4. This is in addition to energy suppliers writing to eight million customers paying by quarterly credit (cash or cheque) to advise them how they can save money by changing their payment method to direct debit.
5. Smaller energy suppliers are not required to offer discounted insulation under the CERT scheme. However consumers with these suppliers can contact them to see if they are on the best tariff / payment type on the numbers below. Anyone interested to see whether a smaller supplier can offer them a competitive rate can use an accredited price comparison service or speak to the supplier directly.

Co-operative Energy Tel: 0800 954 0693
Ebico Tel: 0800 458 7689
Ecotricity Tel: 0845 555 7100 (domestic customers)
First Utility Tel: 0845 215 5000
Good Energy Tel: 0845 601 1410
Green Energy Tel: 0800 783 8851
Ovo Energy Tel: 0800 5999 440
Spark Energy Tel: 0845 034 7474
Utilita Tel: 0845 450 4357
Utility Warehouse Tel: 0844 815 7777

 Press office contact details:

Consumer Focus: Emma Adler, 020 7799 8004, out of hours 07770 433 433
Energy UK press office: Ben Jun-Tai, 020 7104 4169, out of hours 07983 469 764
Citizens Advice: Emma Brennan, 020 7833 7178, out of hours 0845 099 0107

 ‘This report echoes concerns that we have raised repeatedly about the cost and rollout of smart meters. There are many potential benefits of smart metering but they will only be realised if Government gets its rollout scheme right.’

 ‘The costs of the scheme are huge. Customers, who will ultimately foot the bill, need to be confident that they will see tangible benefits that give value for money. The Government needs to listen to what consumer groups and MPs have to say, take stock of the scheme and bring a sharper focus on an efficient and controlled programme that has consumer benefits as its raison d’etre.

On roll-out co-ordination and cost:

‘Britain is one of the only places in the world to rely on a competitive supplier-led rollout and this presents some real challenges. Relying on competition alone risks adding complexity and cost to the scheme and will make it harder to achieve value for money. Greater coordination of supplier activity in installing smart meters will be essential if the scheme is going to work efficiently. Wherever energy companies can they should work with each other, local organisations and social housing providers to provide community-wide installations instead of a piecemeal approach.

 On reaching consumers:

‘The Government is developing a strategy to make sure the scheme engages with the needs of all consumers. This must be more than consumer-friendly window dressing and there need to be specific plans to reach vulnerable customers who are most likely to miss out. It is the opportunity to make sure the scheme is driven forward by its fundamental purpose – to transform the experience of energy consumers. The success of the scheme depends upon getting this right.’

 Consumer Focus is calling for: 

• A strategy to deliver the consumer benefits – Government needs to be clear how this programme will benefit consumers and develop a road map to get there. This should include not just energy savings and accurate bills, but also wider benefits such as lower cost prepay tariffs and improved customer service, social benefits, and increased digital inclusion.
• Greater coordination of supplier activity and community based approaches. This will help consumer engagement and energy savings, reduce the number of visits to homes and keep costs down. Consumer Focus research shows that only 23% of gas customers and 28% of electricity consumers trust their energy supplier to help them go green and save money on their energy bill.
• An extra help scheme for low income and vulnerable consumers – to safeguard consumers and help them save money on their energy bills. Rollout provides a unique opportunity to deliver existing fuel poverty schemes more cost effectively  - these opportunities must not be missed.
• The communications and engagement strategy should include a lead role for Government; free customer access to high quality support and advice on how to use their smart meter to save money, including independent advice on how to save money; and minimum standards for energy displays – to ensure they are easy to use and can help customers budget more easily.
• Annual reporting on the costs and benefits to customers, including reporting on the impact on the fuel poor and prepayment meter customers.

 ENDS

Responding to E.ON’s 6% price cut on electricity announced today, Adam Scorer, Director of Policy and External Affairs at Consumer Focus, said:

‘With cuts from five of the Big Six the spotlight is now on Scottish Power as the last of the major suppliers to act. Their customers will also be keen to see if the supplier will buck the trend and makes deeper cuts or reductions across both gas and electricity given wholesale price falls in both.

‘It’s good to have seen such a quick series of price reductions. We hope this shows suppliers are waking up to the need for customers to see rapid cuts when wholesale prices are low and that this trend will continue if wholesale costs carry on falling. But customers will still be paying a lot more for their energy than they were a year ago and there will still be almost seven million households in fuel poverty.

‘There is still a long way to go for suppliers to regain consumer trust. The next steps after these small price reductions will be for the industry to embrace Ofgem’s market reforms. That should include buying and selling more of their energy on the open market, selling energy to small suppliers on reasonable terms, and being more transparent on their actual cost of energy.’   

ENDS

 Notes to editors:

•  Please note: The wholesale cost of energy is the biggest single component of a retail energy bill – making up about half of the customer’s bill. Other areas of costs include network charges (for using the pipes and wires that bring energy to people’s homes), meter charges, the cost of environmental programmes and VAT. Ofgem provide further information. 

• Wholesale gas prices “peaked” at 73p/th 30/08/2011, they are now 59p/th. Electricity peaked at £60/MWh 05/04/2011 and is now £45/MWh.

‘Cuts from four firms in three days is a good sign. We hope this rapid succession of announcements means that they understand that consumers expect them to respond quickly when wholesale costs are down for a significant period of time. 

‘Scottish Power and E.ON customers will expect to see their suppliers rapidly follow suit given the speed from other suppliers. People will also be keen to see if any supplier makes cuts across both gas and electricity given the downwards trend in wholesale costs for both. 

‘These cuts will not compensate for the big rises in 2011, they will not transform the energy market or significantly lessen the burden on hard pressed consumers. If companies are more prepared to cut prices quickly when wholesale markets allow, if they fully embrace Ofgem’s market reforms and they mean what they say about earning consumer trust, then the rehabilitation of energy companies may be possible. But there’s a long road to travel first.’ 

Consumer Focus also welcomes the news that npower will temporarily waive the penalty fee for fixed term customers. 

ENDS 

Notes to editors:

Price change details:

Dual Fuel Price Changes

Electricity Price Changes

Gas Price Changes

• Please note: The wholesale cost of energy is the biggest single component of a retail energy bill – making up about half of the customer’s bill. Other areas of costs include network charges (for using the pipes and wires that bring energy to people’s homes), meter charges, the cost of environmental programmes and VAT. Ofgem provide further information.
   
• Wholesale gas prices “peaked” at 73p/th 30/08/2011, they are now 60p/th. Electricity peaked at £60/MWh 05/04/2011 and is now £46/MWh.  

‘We agree that the Financial Services Bill needs to have stronger provisions to protect consumers. The right balance between the demands of industry and the needs of consumers has not yet been struck. This is a once in a generation opportunity to reform our financial regulation and it is vital we get it right and learn from mistakes of the past such as the mortgage endowment and PPI scandals.  

‘In recent years the FSA has done a better job in protecting consumers and has been more willing to root out poor practice and products. It is important that the FCA takes further steps forward as consumers must be able to rely on an effective watchdog that is ready and willing to fight their corner.’ 

To improve financial regulation, Consumer Focus is calling for:

• The FCA to have a clear, strategic objective to deliver fair, efficient and transparent markets
   
• The FCA to have, a clear operational objective to  ensure effective competition in financial services   
   
• A better balance between the responsibilities of firms and of customers. As it stands the onus is on customers to be responsible for understanding incredibly complex products – even a standard credit agreement can take almost an hour to read and requires Masters degree level education to understand – but there is no corresponding duty on firms to ensure the product is appropriate for the consumer.   
   
• Early intervention when products or markets cause detriment for consumers – we must prevent a repeat of the PPI scandal where products are mis-sold over many years. The FCA should act, and act decisively, to stop poor practice in financial services before it becomes entrenched  
   
• The FCA should have particular regard for the needs of vulnerable consumers such as those on a low income, older people and consumers with disabilities.  
   
• The FCA should ensure that all consumers can access basic financial products

‘Consumers will be pleased with further price cuts so hot on the heels of EDF Energy’s reductions. This is the quickest succession of price changes we’ve seen and we hope this signals that suppliers are becoming more alert and responsive to market developments and to what their customers need. With three of the Big Six announcing price cuts the heat is now on for others to follow suit and help ease the pressure of high energy bills for their customers. 

‘It’s good to see cuts being made to both gas and electricity prices, even if by different firms. While companies will respond differently depending on where they think wholesale prices are heading, wholesale gas and electricity prices have fallen over the last year and this narrowing of costs must be reflected in consumer prices. 

‘The widening gap between wholesale and retail prices has become the fault line for consumer confidence. Companies want to regain the trust of their customers. Narrowing this gap is a necessary part of achieving this. 

‘The other three major suppliers should act now if they want to be seen as committed to an effective competitive market.’

ENDS

Notes to editors:

Average annual energy bill figures:  

Dual Fuel Price Changes

Electricity Price Changes

Gas Price Changes

Comparative wholesale and retail energy prices 

• Please note: The wholesale cost of energy is the biggest single component of a retail energy bill – making up about half of the customer’s bill. Other areas of costs include network charges (for using the pipes and wires that bring energy to people’s homes), meter charges, the cost of environmental programmes and VAT. Ofgem provide further information.
    
• Wholesale gas prices “peaked” at 73p/th 30/08/2011, they are now 60p/th. Electricity peaked at £60/MWh 05/04/2011 and is now £46/MWh.

‘This is an overdue but nonetheless welcome move. EDF Energy is the first of the major suppliers to reduce prices and the others will need to respond. The cut is not enormous given the scale of increases last year but it creates some important momentum in the market. It is now up to the rest of the ‘big six’ to compete and consumers will expect to see price come down across the board. 

‘Wholesale prices are at their lowest point in almost a year and the trend is down. Underlying market fundamentals – especially wholesale prices – should determine the price consumers pay. These fundamentals have clearly changed in the energy market and retailers should respond.

‘Companies argue that they follow the global commodity market. They also maintain they want to regain consumer trust. Here’s a way to do both.’

Notes to editors

• A recent Populus poll found that energy prices were people’s number one concern.  Ofgem reports that supplier margins are near record levels, over £100 per household per year. The ability of smaller suppliers like Ovo to undercut them, despite their inherent disadvantages as a new entrant, suggests that the dominant players must respond if their argument that the market is competitive is to be credible. 

Figures for average annual bill

Forecasted EDF Dual Fuel Price Changes

Dual Fuel (Medium User)

Forecasted EDF Gas Price Changes

Gas (Medium User)

Note: The average figure is based on industry standards for comparison purposes (i.e. 16,500KWh for gas, 3,300KWh for electricity). Also Ovo’s tariffs are all direct debit only.

Comparative wholesale and retail energy prices

• Please note: The wholesale cost of energy is the biggest single component of a retail energy bill – making up about half of the customer’s bill. Other areas of costs include network charges (for using the pipes and wires that bring energy to people’s homes), meter charges, the cost of environmental programmes and VAT. Ofgem provide further information.

‘It is good news that Ovo has cut its prices and this will be welcomed by consumers looking to get a cheaper deal. The average customer bill is up by 14% since last summer, leaving many household budgets increasingly stretched. 

‘Customers will be glad to see that Ovo has reflected falling wholesale costs in the prices they are asked to pay. This is a market fundamental which must be reflected across the sector if wholesale costs continue to fall. The gap between wholesale and retail prices remains a fault line for consumer confidence in the energy market. The further the wholesale price falls the greater will be the clamour for others to follow OVO’s lead.’ 

Ovo’s price cut follows a 3% price decrease from Co-operative energy announced in December.

Consumer Focus would urge anyone worried about their energy bills to look into whether they could save money by switching supplier, tariff or payment method, taking up free or discounted insulation and finding out if they could be entitled to any extra benefits. Information and advice is available on Consumer Focus’s website.

ENDS

Factfile:

• Consumer Focus research from November shows that over half of people in Britain are worried about being able to afford their energy bills this winter. The figure is even higher among families and older people living on low incomes, with almost two thirds concerned.
• One in six people plan to only heat half, or fewer, of the rooms in their house this winter.
• One in 20 people will only be heating one or two rooms, rising to one in 10 of those in the poorest social group. 

Current direct debit average annual bills

Note: The average figure is based on industry standards for comparison purposes (i.e. 16,500KWh for gas, 3,300KWh for electricity). Also Ovo’s tariffs are all direct debit only.

‘It is good to see this opening up of legal services.  The prospect of one-stop-shop legal services, coupled with robust consumer protection, should offer people greater convenience and more choice. 

‘We may see more innovation in the way that services are delivered and would like to see increased choice lead to more competitive pricing.’

ENDS

Notes to editors:

Link to the Solicitors Regulation Authority

‘Charges that reflect actual costs and that are upfront for all to see are legitimate. But, the convenience for consumers of using a debit or credit card online should not be an invitation to firms to impose extra, hidden or excessive charges.

‘Given that so many firms hide charges and confuse consumers as part of their routine business model, this decision is long overdue and good news for consumers.

‘No-one should be allowed to drag their feet in implementing the changes. Companies are very quick to find new ways of adding costs on to consumers, but can be painfully slow to unravel the tricks and the complexity of these charges.

‘In particular 2012 should be a much better year for travellers as hidden charges and misleading marketing for airlines tickets and travel money are tackled head-on. Making markets simpler and fairer must be a priority for 2012.’

ENDS

‘We think cuts in the solar subsidy are necessary. But they should not be made at the speed planned by the Government and the scale of the cuts needs further consideration – particularly for social housing and community schemes.

‘Six weeks is clearly not long enough to make such major changes and many consumers who had already signed contracts would have lost out under these moves. With such a big investment people need certainty so the Government must tell consumers what tariff now applies and a realistic timetable for any change. 

‘Today’s decision will undoubtedly see a major push from installers to capitalise on installing at the current subsidy rate. We’d urge consumers to make sure they think through any decisions, not be rushed by installers, and know their rights before they sign a contract.’

Top tips consumers should consider when thinking about installing solar panels:

• Shop around: Get at least three quotes whether you are looking to pay for panels upfront or join a ‘rent a roof’ scheme
• Only use companies who are members of the REAL Assurance Scheme (the Consumer Code for the industry) and certified under the Microgeneration Certification Scheme (MCS)
• Do not sign a contract until you are sure you want to go ahead. There is a seven day cooling off period but you may need longer to shop around and check testimonials. If you feel pressured to sign, walk away. That is not the way a trustworthy company does business
• If you are considering a free solar panel deal make sure you ask the right questions using Consumer Focus’s factsheet
• Make sure you look into making your home as energy efficient as possible – making the most of loft and cavity wall insulation. Whether you decide to install solar panels or not this would be likely to save you at least £100 off your energy bills each year.

 See Consumer Focus’s solar panels information page for further advice

ENDS

Don’t forget, if you want to keep up to date with all our news as it happens you can follow us on Twitter.

Enjoy the festive season and happy New Year!

Super-complaint on holiday money

Last September we made a super-complaint to the Office of Fair Trading (OFT) on travel money. We criticised the complex charges and misleading information that mean consumers pay too much when buying foreign currency or using bank cards abroad.

Today the OFT announced it has reviewed the market and will work with the industry to make improvements based on our super-complaint:

1. The major banks have agreed to stop charging customers a withdrawal fee for using debit cards to buy currency from the end of 2012.
2. Customers will be given clearer information about charges so that they can shop around and compare prices more easily.
3. Businesses will review their marketing to avoid misleading phrases like 0% commission. Consumers often don’t realise that the exchange rate already includes the supplier’s fee.

We welcome these changes but would like the timetable for scrapping charges for using debit cards to buy foreign exchange to be speeded up. Some banks say they will have changes in place by summer 2012 so there is no excuse for others not to follow their lead. Providers still need to make using cards overseas simpler and review the way travel money is marketed.

What do you want to see from us in 2012/13?

In our annual plan for 2011/12 we told you what we would be doing for consumers in the energy market and postal services. We also outlined our work on financial services, consumer empowerment, copyright and the framework of consumer law. We still think the areas of work set out in that plan are those to which Consumer Focus has the greatest contribution to make. We need your comments on how we can make that contribution most effective.

The breadth and character of our work will be determined by the resources we have available and the decisions we make about where they should be focused given the activities of other consumer bodies. We will continue to be an effective voice for consumers in 2012/13 and we will do that by working with our stakeholders, especially those who may take on parts of our work in any transfer of responsibilities.

Please email you comments to con.res@consumerfocus.org.uk by 1 March 2012.

Energy update

We have been pushing for reforms in the energy retail market and important changes are afoot. Five of the ‘big six’ energy companies have banned cold-call doorstep sales and four have committed to simplifying their tariffs.

SSE has agreed to repay its customers any financial losses incurred as a result of switching to SSE after being given inaccurate information or being misled.

Suppliers are now trialling new methods of sales which are more in line with what consumers want and need. We’re delighted that suppliers are putting a stop to doorstep sales. But the big issue for suppliers now is how to reach the group of consumers who would normally engage with the competitive market via doorstep sales.

We are working closely with Citizens Advice on Big Energy Week. This event, in January, will encourage people to consider switching energy suppliers to get a better deal. Consumers will get practical help and advice on cutting energy bills and getting the financial support they may be entitled to.

We’re pleased to see that several of the switching websites, as part of the Energy Consumer Summit, offered to roll-out a ‘ send us your bill‘ service of the kind pioneered by uSwitch. This will help consumers find the best deal for them.

The coming changes to energy tariffs should and reduce complexity for consumers and make switching decisions easier. Ofgem, the energy regulator, has proposed one standard tariff consisting of a unit price in pence per kilowatt hours and a standing charge, which they would set. This would result in ‘teaser tariffs’, where consumers are enticed by introductory offers which only last for a limited amount of time, being withdrawn from the market.

Accompanying Ofgem’s proposals and suppliers’ commitments on tariff simplification, will be improvements to bills, annual statements and price-rise notification letters. These are all things we at Consumer Focus have been pushing for, for a long time.

Post news

Royal Mail’s latest Quality of Service results for the quarter covering the summer months (June to September) showed an improvement from the previous quarterly results. However, improvement must continue over the winter months if Royal Mail is to meet its full year standards.

If you haven’t posted your Christmas cards yet today is the deadline for First Class post, and Thursday 22 December is the deadline for Special Delivery.

Find out more about Royal Mail’s trial of delivery to a neighbour on our blog.

Group bargaining power

Competition in energy, telecoms and financial services markets depends on individual consumers switching to better deals. But, these markets are complex and time consuming and switching is a rare occurrence. Given we live in an age where social media makes it easy for consumers to connect, could an alternative approach be offered to consumers? An approach where a new kind of service would join together consumer demand and use this to win a better deal? This is the concept we are exploring in our work around collective switching.

Richard Bates, Director of the Consumer Empowerment Programme at Consumer Focus explored this concept in a presentation at the Department for Business, Innovation and Skills’ Buy It Together conference in December. He has also written a blog post on the subject.

What’s new from Consumer Focus

Keeping FiT
This report looks at consumer experiences of renewable energy and the development and delivery of associated schemes:
• Feed-in Tariff (FiT) reviews
• Renewable Heat Incentive
• Green Deal

Read the Keeping FiT blog.

Through consumers’ eyes
A thought-provoking report with practical guidance for those with an interest in promoting the consumer interest in future.

Staying connected
All your energy questions answered, from how to switch supplier and get the best deal to what to do if something goes wrong.

You can find all our latest research and reports in the publications section on our website.

Energy complaints
Our latest energy complaints league table shows that complaints against energy companies have risen by an average of 26 per cent in the last quarter (July to September). Not surprisingly the rise in complaints came at a time when price rises were announced and started coming into effect.