Those who thought that energy regulator Ofgem worked to protect consumers from rapacious energy companies might want to think again.
Latest ill-conceived wheeze from the watchdog was to supply the companies with full details of anyone who had been with the same energy company for three years or more, with the idea that the companies could then contact those consumers with deals to switch supplier. This was based on information from the Competition and Markets Authority that anyone still with their energy company after three years was, rather like those who stuck with the same insurance company, probably paying a lot for their misplaced loyalty, or inertia.
So rather than continue to advise customers that they should switch, and perhaps supply some guidance on how best to do it, some bright Ofgem spark thought it would be a good idea to supply customer’s data to the energy firms and let them do the aggressive marketing, by the junk mail, junk telephone calls and unwanted door stepping they are all so good at. So the energy companies could then target all their competitor’s loyal customers and get them to switch with low-price offers, before ramping the price up over the next three years, of course, while their competitors were doing the same to them.
Sadly the energy companies, along with insurance companies, haven’t yet seen the folly of rewarding cut-rate new customers at the expense of profitable old ones, and until they do nothing will change in their markets. Perhaps Ofgem could do some real good by encouraging loyalty bonuses for existing customers, which would also attract new customers?
Meanwhile the energy regulator has quietly dropped its plans after a test marketing exercise revealed “issues”.