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’ll test it and how customer data will be kept secure.
About 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’re trialling different approaches to test which is most effective.
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 will be testing this through a collective switch trial.
In early 2018, we will appoint a third party ‘consumer partner’ organisation to negotiate a competitively-priced, ideally market-leading, tariff.
What will the consumer partner do?
The consumer partner will calculate the saving each customer could make with the new tariff based on their current energy use.
They will then write to each customer to let them know their projected savings. This letter will include a link and call centre number for switching to the new tariff and/or conducting a wider search comparing tariffs across the market.
Can anyone take part in the trial?
We have selected one of the six larger energy suppliers as our ‘partner supplier’ for the trial, so it won’t be open to everyone.
The partner supplier will identify 50,000 of their customers who have been on a standard variable tariff for three years or more, and offer them the chance to see how much they could save with a new tariff.
For the collective switch trial, the letter you will receive from your supplier will list what information could be shared if you choose not to opt out. This will include:
- the tariff (deal) you’re on now and how you pay for your energy
- how much energy you use a year and the kind of meter you have
- your name and address
If you are contacted and don’t opt out, our partner supplier will send the consumer partner your details to calculate your personalised savings and tell you the results by letter.
Your data will be transferred and held securely, in line with data protection law.
If you do not want your data transferred, you will be able to opt out. You can also opt out after the data has been transferred. Your records will then be deleted by the consumer partner.