Ofgem disengaged customer database

Mae’r dudalen yma ar gael yn Gymraeg.

Doing nothing costs you money. The Competition and Markets Authority (CMA) discovered this, as part of its investigation into the energy market: it’s not working for all energy consumers.

This is because the people who stick with the same energy tariff year after year typically end up paying more than those who switch – collectively, £1.4bn per year more.

The CMA decided that one way to fix this is a service for those who have been on an expensive ‘standard variable’ tariff – a supplier’s basic energy offer – for over three years. If that’s you, the disengaged customer database will deliver a range of services to help you get the best energy deal.

Here we explain the database, and how we’re testing it and how customer data will be kept secure.

About the database

Why has Ofgem introduced the database?

To help consumers on more expensive standard energy tariffs, the CMA recommended that we:

  • Develop and operate a secure database of information of consumers who have been on a standard variable tariff with the same supplier for three years or more. The database will contain, for example, information about these consumers’ energy tariffs and annual energy use. This is needed to calculate cheaper tariff offers.
  • Test how the service(s) work so we can address any potential running problems and ensure customer data is secure.
  • Monitor the impact of the service(s) on improving engagement in the market.

In addition, the CMA recommended that we work to identify, test and implement measures to give consumers information that will further encourage engagement in the market. 

Testing the database 

We don’t want to launch a service to millions of customers without having tested it first. So we have trialled different approaches to test which is most effective.

Postal offers trial - January 2017

In January 2017, we carried out a small trial with suppliers contacting customers with better tariff offers by post. This proved successful. 

But our user research suggests a digital service might better meet consumer needs. A digital service would allow you to find and switch to cheaper deals, without needing to remember complex information, at a convenient time like on your commute to work. The digital service we tested was called ‘Check Your Energy Deal’.

About the Check Your Energy Deal trial

This trial tested the effectiveness of a ‘digital service’ format.

We ran our digital service trial in Northampton over eight weeks from September 2017. The trial wasn’t open to everyone in Northampton – only with those who have been on a standard variable tariff for three years or more with E.ON our partner supplier for the trial. Around 10,000 customers were involved.  

Tariff information and energy consumption were pre-entered for customers within the digital service. All they needed to do was confirm their postcode, address and the name of their current supplier to see if they were on an expensive deal.

This digital design also meant we didn’t share customer data with any energy suppliers. If customers wanted to, they could also choose to share limited information held by us with a price comparison website through the service. They could then help customers shop around further. 

If you’d like to see the initial results of our research trial, see our page on research with household consumers.

Testing database services

We will be rolling out a database and service that will help customers switch energy deals from autumn 2018. Currently we are working with suppliers to ensure their data is accurate and their systems are ready.

Since the CMA concluded its investigation into the energy market back in 2016, we have been testing different approaches for engaging energy customers and helping them to switch to cheaper tariffs. 

Our user research suggests that some customers might prefer to have a trusted third party acting on their behalf to negotiate an energy deal, and help those who want to switch. We have been testing this through a collective switch trial.

Collective switch trial - February 2018

In February 2018 we ran a collective switch trial. Approximately 50,000 customers who had been on a default tariff for three years or more received letters showing personalised savings (based on consumption and existing tariff) if they switched from their current deal to the exclusive collective switch tariff.

The collective switch tariff and other available tariffs on the open market were available from EnergyHelpline on their website and over the phone. Some customers also made their own comparisons and switched either to a new supplier, or to a better deal with their current supplier.

What was the result of the trial?

This was the most successful trial to date. More than one in five disengaged customers who took part changed their energy deal. This is eight times the switching rate for customers who received no information through the trial about better offers.

What are the next steps?

We are launching two larger-scale trials from autumn 2018. The results will inform our next steps, including our ongoing policy development process, which will include considering how we might bring the benefits of this approach to a wider range of disengaged energy consumers

Your data

What customer data is being stored and shared?

For the collective switch trial in February 2018, suppliers sent a letter listing what information could be shared if you chose not to opt out. This included:

  • The tariff (deal) you were on now and how you paid for your energy
  • How much energy you used a year and the kind of meter you had
  • Your name and address

If you were contacted and didn’t opt out, our partner supplier sent the consumer partner your details to calculate your personalised savings and provide the results by letter.

We will update this information for the next phase of our trials soon.

How can I be sure my data is secure?

During the trials, your data was transferred and held securely, in line with data protection law.

If you did not want your data transferred, you were able to opt out. You could also opt out after the data had been transferred. Your records were then deleted by the consumer partner.

We will update this information for the next phase of our trials soon.