Welsh energy consumers who take more than ten days to pay their bills face being penalised by more than £100 a year by a leading supplier – Consumer Focus Wales has learned.
Wales’ Consumer champion is challenging ScottishPower –the main electricity supplier in North Wales – to change its ways, after learning that consumers are being charged an extra £150 a year [1] if they don’t pay within ten days of the bill being issued. The company is alone among energy suppliers in charging this rate.
Those customers who cannot pay promptly face higher prices, and considerably overpaying for their energy. The policy affects people who pay quarterly by cash or cheque, who according to Ofgem are more likely to be older people.[2]
Ceri Williams, energy policy advocate for Consumer Focus Wales, said: “Customers may not realise that they are paying penalty rates because it is not made sufficiently clear to them. The terminology used by the company might also affect the way consumers view the charges.
“For example, consumers may not be as concerned about missing out on a ‘prompt pay discount’ as they would be about avoiding a ‘late pay penalty’.”
The consumer champion has called on ScottishPower to end this practice, and has also raised the issue with the energy regulator Ofgem.
Mr Williams added: “We want to encourage consumers who are currently paying quarterly to consider moving to a different payment method, such as direct debit. If consumers still wish to pay by cash or cheque, we would encourage them to consider switching to a different supplier.”
Furthermore, ScottishPower charges its electricity customers in North Wales up to £71 more than its electricity customers in neighbouring regions in England. It costs £20 more a year more to distribute electricity in north Wales, which accounts for some, but not all of the price difference.
ScottishPower bought Manweb in 1995 and inherited the customers of the former nationalised company for the region. Customers who have stayed loyal to the company are now paying a premium for their electricity.
Consumer Focus Wales’ quarterly domestic energy report highlights the cheapest deals currently available, as well as providing valuable information on how to switch supplier. A consumer in north Wales who has never switched supplier or payment method could save around £366 a year on their current fuel bills, by changing to a dual fuel tariff which is paid by direct debit and managed online. [3].
A number of price comparison sites and phone lines are available to help consumers switch. The Consumer Focus Confidence Code ensures that these price comparison websites are independent and impartial. Consumers using an accredited site can be confident they are seeing all available tariffs and that the results are completely unbiased.
Notes:
[1] This is the maximum charged per year to dual fuel customers who do not pay their bills within 10 days of issue.
[2] According to Ofgem’s Energy Supply Probe, older people are among the least active consumer groups, are most likely to be with their original supplier and pay by standard credit. Only a third of older people have access to the internet, and so are least able to compare offers or access the cheapest online deals. According to the Department of Energy and Climate Change’s Quarterly Energy Prices June 2010, 46 per cent of quarterly credit customers in North Wales are with ScottishPower.
[3] A consumer in north Wales who has never switched supplier or payment method is supplied by British Gas for their gas and by ScottishPower for their electricity, and pays quarterly by cash or cheque, paying on average £1,261 a year.
