Business

Gas and electricity bills 'designed to confuse'

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Media captionAdam Scorer, Consumer Focus: "It is the responsibility of energy suppliers to trade fairly"

A group protecting consumers' rights has written to watchdog Ofgem to complain about "extremely concerning behaviour" by energy firms.

Consumer Focus said the big six firms offer "confusing tariff behaviour and unclear price rises".

Its move follows a slew of electricity and gas price rises in the past month.

It comes a week after Ofgem launched an investigation into the price rises by some firms, saying they have widened the suppliers' profit margins.

'Designed to confuse'

Three of the big six energy companies have increased their prices this year - blaming the rising wholesale prices that they have to pay.

But Consumer Focus says that, on top of price rises, the gas companies are not being fair with consumers in other ways.

The consumer watchdog has written to Ofgem saying that the multiple energy tariffs are "overly complex", offer "dubious discounts" and are "designed to confuse".

It also pointed out some specific issues:

  • Scottish Power halved the discount for prompt payers and increased prices within weeks of the original offer being made
  • First Utility was accused of increasing its prices for new customers "shortly after" they signed a contract.

And the potential to confuse was highlighted - the Big Six offer 93 different tariffs to choose from, an average of over 15 different products per company.

"In our competitive energy market customers can choose from a wide range of different energy tariffs to suit their needs," said industry body Energy UK in response.

"Energy companies are constantly innovating to offer their customers a range of deals and a variety of payment methods."

First Utility told the BBC that prices offered to new customers would not be increased for a minimum of three months and it disputed Consumer Focus's claim.

A statement from the supplier said: "First Utility has managed to keep most new customers' prices unchanged for between six and seven months, despite the recent fluctuations in wholesale costs.

"First Utility remains the cheapest energy supplier in the UK."

Last week Ofgem announced a detailed review of the entire sector fearing that it was making excessive profits.

And on Tuesday the bosses of Britain's largest energy companies will appear before MPs to answer questions about how tariffs are set.

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