News and events
Co-operative Energy turns up heat on Government to create impartial comparison service for energy customers
Leading energy provider, Co-operative Energy, is calling for swift action from the Government to set up an independent information and comparison service for energy customers after research* revealed that a staggering 78 per cent of consumers stated that they would use an impartial service instead of a commission based comparison site.
Member-owned Co-operative Energy, which has over 200,000 customers, is calling for the Government to create a public serving, independent information and comparison service that is both impartial and doesn’t mislead the public. The only resource currently available for consumers to compare energy prices, beyond calling each of the energy providers individually, are the switching sites. The switching sites are misleading customers as they’re positioning themselves as a service when in reality they are profit maximising sales organisations, charging the energy companies a disproportionately high commission which they in turn pass on to customers through energy bills.
The results showed that over three quarters (81 per cent) of consumers said that they think commission charges passed on via energy bills are unfair. Almost two thirds of consumers surveyed (60 per cent) stated that the fact comparison sites earn commission from energy suppliers will put them off using comparison sites in future. And many consumers confessed to being in the dark about how switching sites work with nearly half (48 per cent) unaware that they make their profits by charging the energy suppliers a commission per switching customer. 49 per cent think charging a commission is unethical.
The independent research commissioned by Co-operative Energy indicated that over a third (39 per cent) believe there should be no commission charge to pay to the comparison site during the switching process. 30 per cent thought an outlay of under £10 would be a reasonable payment.
Ramsay Dunning, group general manager of Co-operative Energy said: “Our research findings show that consumers are not happy with the current situation and that many feel they are having the wool pulled over their eyes. Establishing a properly regulated, Government-backed alternative to the switching sites represents a further step forward in creating greater transparency across the energy sector. For some time we have been campaigning for an impartial, not-for-profit regulated comparison service as customers are being misled into believing they are being provided with a service showing the best prices, when in reality the switching sites are only providing them with products paying fat commissions.
“We felt it only right to champion the need to create an independent information and comparison service, so the public can be confident of impartial trustworthy information to help choose the best deal available.”
The creation of an official, impartial and free-to-use service will present consumers with all the available tariffs currently on the market and enough relevant supporting information to allow an informed decision to be made on which energy supplier to use, it will also serve to bring energy bills down.
Mr Dunning believes the commercial comparison sites don’t always operate in the best interests of consumers: “Customers have a right to be able to compare energy tariffs and what we have at present is a situation where some online comparison sites are not being transparent in their dealings and are deliberately directing customers only to commission generating tariffs. Comparison sites are misleading customers as they are pointing them towards the tariffs that pay commission rather than displaying the whole range available.
“There is no questioning the convenience of comparison sites but this needs to be impartial and for the benefit of the public rather than designed to generate maximum profits for the site operators. We believe energy customers should be able to look forward to having the convenience of the comparison sites without fear of paying over the odds on their energy bills. Providing fair choice and competition for consumers is what is required and the sooner this becomes reality, the better.”
You may have seen an article in The Times today (27.02.14) which implies that Co-operative Energy is owned by The Co-operative Group. Co-operative Energy is owned by The Midcounties Co-operative, the largest independent consumer co-operative in the UK, and not The Co-operative Group. The two societies operate independently.
Leading energy provider, Co-operative Energy, has become the first energy supplier to receive the Fair Tax Mark accreditation. The Fair Tax Mark is the world’s first independent accreditation scheme to address the issue of responsible tax and The Midcounties Co-operative, which Co-operative Energy is part of, is one of the first businesses to receive the accreditation.
The Mark, which has been developed by a team of tax justice campaigners and tax experts, shows that a company is making a genuine effort to be open and transparent about its tax affairs and pays the right amount of corporation tax at the right time and in the right place.
The accreditation of the Fair Tax Mark pioneer companies comes at a time when recent polling from the Institute for Business Ethics has found that corporate tax avoidance is now the number one concern of the public when it comes to business conduct. The energy industry has also been embroiled, with the tax practices of a number of Big Six energy providers being called in to question.
Ben Reid, Chief Executive of The Midcounties Co-operative, said: “We launched Co-operative Energy with a pledge to be fair and transparent and to challenge the Big Six to stamp out sharp practices. To be the first energy company in the UK to receive the Fair Tax Mark accreditation demonstrates our commitment to customers that we’re committed to reforming the industry and that we are a socially responsible energy business, paying our fair share of tax and investing in the UK economy.”
Richard Murphy, a tax justice campaigner and one of the founders of the Fair Tax Mark said: “Around the world and here in the UK people are now aware that many big businesses routinely fail to pay the taxes they really owe. What they now want to do is spend their money with those companies who are doing the right thing by seeking to pay the fair tax that they owe in the right place at the right time.
“The Fair Tax Mark is designed to allow consumers to identify those businesses who are paying their fair share of tax. This makes the Mark the next step in the campaign for tax justice.”
Cold Homes Week starts this week and climaxes on Friday. The campaign has been created by The Energy Bill Revolution, an alliance of charities, environmental groups, consumer groups, trade unions, businesses, politicians and public figures. Co-operative Energy is a supporter of the alliance and has been challenging the practices of the ‘Big Six’ and championing the rights of the consumer since it launched in 2011.
Co-operative Energy, which joined the Energy Bill Revolution in April 2013, was the first energy supplier to actually introduce a price cut in its energy prices for two successive years and most recently rolled back its planned price increase to 2.5 per cent. After the Government announced its intention to removed social obligations on bills, Co-operative Energy had already removed ECO costs last November. Co-operative Energy then challenged all other suppliers to follow its lead and pass on the saving and where they’ve implemented price rises, provide customers with a rebate.
Co-operative Energy was also the first energy provider to offer customers tailored payment arrangements, helping pensioners and the 3.5 million British workers who receive their income on a fortnightly or four weekly basis. This allows customers to choose to pay their bills either every four weeks, making 13 monthly payments across the year, or fortnightly, making 26 payments across the year, as opposed to the standard 12 monthly payments offered by other energy companies. Last year three fixed tariffs were also introduced to help customers looking to bring down their energy bills safeguard their expenditure in some cases for the next four winters if they so wish.
All the supporters of The Energy Bill Revolution have teamed up this year to help raise awareness of the issues surrounding fuel poverty, and to gain the support of politicians to help make UK homes more energy efficient.
The campaign’s key elements are a big tweet and e-alert on Monday 3 Feb, calling for petition signatories. The campaign twitter hashtag to follow all developments is #coldhomesweek. Key members will also join a debate in parliament, host public meetings and call on the nation to get knitting scarves. The scarves will be presented in a parliamentary reception, along with pictures of the public wearing scarves and images of scarf adorned statues. A symbolic art installation is also planned for Westminster, and an online ‘counting the cost’ calculator has been developed. This calculator allows users to type in their postcode to find out if their local MP is supporting the campaign and find out how many inefficient homes there are in their area.
With the counting the cost element in mind we have compiled a list of simple but helpful tips to help make your home more efficient:
- Draught proofing – undoubtedly one of the easiest and most affordable DIY jobs to save money in your home. Head to your nearest retailer for the best solutions.
- Insulate – Insulation will keep your home warmer for longer. Loft insulation is a quick fix that will not only take under a day to complete, but it can save you up to £180 per year on your home heating bills.
- Double glazing – upgrading your windows can dramatically cut your heat loss and could save you around £170 a year on heating bills. To get a better idea of how much you could save by replacing your windows, use this Energy Saving Calculator.
- Upgrade your boiler – boilers account for 55% of your energy bills, so it’s important you have an efficient one. Upgrading to an A-rated high-efficiency condensing boiler could save you £310 a year.
- Bleed your radiators – if your radiator feels cold at the top and warm at the bottom it is likely it has trapped air in it that needs releasing. Bleeding your radiator is very easy, simply open the small valve on your radiator and allow the excess air to escape. Make sure your heating is off, you have a towel at the ready for any leakages and you wear protective gloves.
For more information visit: www.energybillrevolution.org/cold-homes-week/
Co-operative Energy is set to harness the power of sports fans with the announcement of a major new sponsorship agreement with Supporters Direct.
Co-operative Energy is to become the Official Energy Partner to Supporters Direct in a two year deal lasting until 2016, with fans set to benefit from simplified, competitive tariffs and Supporters Trusts given access to a profit sharing agreement which will see funds pumped back into Supporter Initiatives.
The agreement will also see Co-operative Energy supporting Supporters Direct’s core work in with Rugby League, Premier League, Football League and Non-League clubs the length of the country, which aims to encourage sustainability and supporter involvement in the game.
In addition to securing a set of commercial rights the partnership deal will see Co-operative Energy working closely with all of the Supporters’ Trusts in England and Wales to promote environmental awareness, in particular energy efficiency, and help communicate some of the practical solutions that will move them to a more sustainable future.
Speaking at the launch of the sponsorship deal, Co-operative Energy General Manager Ramsay Dunning said: “We are looking forward to building a successful relationship with Supporters Direct over the next two seasons. Co-operative Energy has not only been identified for our simplified tariffs but we have been recognised in the industry for our outstanding customer service. We will be bringing this to a new network of supporters up and down the country and we look forward to developing this partnership.
And Commercial Manager at Supporters Direct, Mark Bullock said: “I am delighted to welcome Co-operative Energy as the Official Energy Partner to Supporters Direct. Their involvement is representative of our shared cooperative values and celebrates the success of the supporters trust movement in the U.K.
Their support for our core work is particularly encouraging and the partnership allows Supporters Trusts to generate an important residual income which will reinforce the organisations’ community benefit.
Strengthening the Supporters Trust network is at the top of our agenda and we welcome Cooperative Energy to our growing list of commercial partners in the current season and look forward to a successful relationship.”
Co-operative Energy, which is part of The Midcounties Co-operative, now has 200,000 customers.
Pictured below l to r: Mark Bullock, Supporters Direct Commercial Manager and Ramsay Dunning, Co-operative Energy General Manager
Ramsay Dunning, general manager of Co-operative Energy discusses why there is a need for an impartial, not-for-profit regulated comparison website and the ongoing campaign to provide this service for customers who are being kept in the dark over commission charges.
As a member owned business – with no shareholders – we felt it only right to champion the push for an independent information and comparison service. A free to use service which customers know will present all the available tariffs and supporting information to let them make an informed decision on which energy supplier to use. Energy comparison sites are currently unregulated and as such, we believe, are not always operating in the best interests of consumers.
Customers have a right to be able to compare energy tariffs and currently some sites operating are not being transparent in their dealings and are deliberately directing customers only to commission generating tariffs. This is yet another example of the lack of transparency which energy consumers are exposed to.
Many of the switching sites present themselves as a service, when in reality they are profit maximising sales organisations, leading customers by default to the tariffs that pay commission.
There are claims by comparison sites that their service is free to use. But we know it is the customer that ultimately ends up paying for this commission as it is added to their energy bill. Removal of this commission based-structure entirely can only be good news for customers as it would lead to a drop in energy bills.
We know that not all comparison sites are the same but what we are saying is that consumers must be adept at navigating the sites effectively in order to see all the tariffs available. Many ask leading questions which act as a channel for sharing the deals which ensure a commission for the site. This is misleading as there may be a deal available that the site does not have a commission arrangement with, but would be better suited to the customers’ energy needs. The customer could easily sign up for this deal directly via the suppliers own website. The prices being quoted are exactly the same as the price a customer would pay if they went to the energy supplier direct.
Some of the methodology the switching sites use for calculating annual savings is questionable. Lots of assumptions are made which do not always put the customer first. For example, sites often assume that when a product ends, the customer will rollover to a variable rate which has a higher unit cost attached. This results in some customers being sold a product which is not always the best and most suitable deal available
Another area of concern is that the cost to acquire via the switching sites is greater than the total profit gained by the supplier who manages the total risk. Under Ofgem rules, it is important that the end bill is cost reflective and the customer is paying a fair price.
The comparison sites claim they only charge a small admin fee when in reality what they charge is a sales commission. Even describing the commission as an admin fee is misleading consumers as it infers only a small charge.
As energy suppliers we are legally bound by confidentiality clauses, which take both parties to agree disclosure. I give permission for disclosure, therefore releasing those switching sites with whom we are contracted from confidentiality. If they refuse to disclose how much we pay that is their choice, there are no legal restrictions.
There is no questioning the convenience factor comparison sites provide. How many of us have the time to research multiple websites looking to get the best deal whether it is for a new energy, insurance or mobile phone contract?
In our ongoing crusade to bring transparency to a sector that has become increasingly confusing, Co-operative Energy will continue to campaign hard to protect the customer by calling for the creation of an impartial not-for-profit information and comparison site, which is properly regulated by OFGEM or the Government. In the interest of helping to bring down energy bills further and operating a fair and transparent energy market, this is what consumers need.
Ramsay Dunning, Co-operative Energy’s group general manager said: “We are delighted to see that the Government’s Community Energy Strategy sets out a significant increase in encouragement and support for the sector. The rapid growth of new, independent generators and suppliers shows that change is well under way. In just two years, Co-operative Energy has acquired over 200,000 customers and we have a real appetite to supply them with more community energy. To date, that has been difficult as there has been so little around, but with this strategy we envisage that changing.”
Ramsay Dunning, Co-operative Energy’s group general manager said: “There is much to applaud in the EU’s announcement today especially the commitment to reduce greenhouse gases across Europe by 40%. However, we think more is needed on renewable energy. The EU’s own impact assessment shows that leadership on renewable energy brings improved energy security, hundreds of thousands of extra jobs and lower energy prices in the long run. Last year, more than half of Co-operative Energy’s electricity supply was derived from renewables, so we know it’s possible for Europe to go further still.”
You’ve already crashed and burned on the New Year’s resolutions, the miserable weather and dark days are getting you down, work is a real struggle after the Christmas break and financially, it feels like the end of the month can’t come soon enough.
Today is ‘Blue Monday’ officially the most miserable day and Co-operative Energy has outlined a series of simple steps which can not only see you through to the end of the month but help you to make significant changes which will benefit you from this point onwards.
First of all don’t let everything get on top you, January can be a long, hard and depressing month for many but it’s also a great time to reconsider your finances and start afresh for the year ahead. You’ll feel in great shape after tackling any money matters and updating your budget to free up some much needed cash after Christmas.
At Co-operative Energy we believe that carrying out a simple ‘life laundry’ can help you to get to grips with many of the financial hardships that have such an impact in January.
Hopefully the following steps will help put a smile back on your face before the month is out….
Step 1 – Get to grips with your household budget
Take a look at your budget and write down all incoming cash and essential outgoing payments. Then decide which unnecessary costs you can cut out (like magazines, unused cable or satellite entertainment packages or meals out) and see how much you could save. There are ‘cutback calculators’ available online which can help you to do this and put a framework in place https://www.moneyadviceservice.org.uk/en/tools/cut-back-calculator
If you can put any savings you make aside, these will soon mount up and could be put towards a holiday fund or in preparation for any emergency or unexpected expenses later down the line.
Look at your bank statements too. Are there any mystery direct debits such as the gym membership you signed up for last January, used for a month and then forgot about completely? If so – cancel it for immediate savings.
Step 2 – Shop around and compare
Now it’s time to consider where more significant savings can be made such as on household bills – gas and electricity or phone and broadband. It is likely that there are better deals available so it can really pay off to spend some time shopping around – there are plenty of comparison sites to get you started.
Why not put aside half a day at the weekend to tackle the finances or even some time in the evening on Blue Monday itself! The savings can amount to hundreds of pounds and it really isn’t as daunting as it would appear once you put your mind to it. It’s also worth considering helping older relatives or friends to do the same – they might not have the equipment such as laptops, tablets and smartphones that can help to make the whole process so much easier.
Begin with the biggest bills, for example, energy – look at some of the short and long term fixed deals out there. Co-operative Energy offers a very competitive one, two and three year tariff which means you can safeguard your energy prices for up to four winters and maybe even save some money by switching in the first place!
Record numbers of households switched energy provider at the end of last year, after the ‘big six’ firms announced inflation-busting price increases
An estimated 150,000 families left the big six energy suppliers altogether in protest at spiralling prices, and turned to one of the smaller alternatives. Many will have saved hundreds of pounds by switching to a cheaper tariff.
Just last week the new Which? annual energy survey revealed that the big six had scored the lowest overall customer score among energy companies serving Great Britain proving that it’s not all about price. Good customer service is of paramount importance to consumers. http://consumerinsight.which.co.uk/
Once you’ve sorted out your outgoings and household bills – aim bigger! If your mortgage deal ends soon check out what other deals might be available. The same applies to insurance policies – when renewing don’t just stay with the same policy provider shop around to see if you can save more money.
Step 3 – Keep on top of things
After you’ve done all that all you need to do is to keep it up. Think about all areas of expenditure where you can make potential savings and plan for the year ahead. Keep your own priorities in mind, whether it’s a pension, a family holiday or a new car. Use apps and online tools to help you stay financially fit – they will help you to keep track and remain in the driving seat.
These three simple steps will provide peace of mind helping you to kick Blue Monday into touch and giving you the motivation to make a great start to 2014.
It’s that time of year again. As we start 2014, plenty of people are starting to think about things they want to change with their lives. Losing weight is usually top of the agenda for New Year’s Resolutions, but what about saving money and while we’re at it, the planet? From heating our houses to doing the laundry, we use energy in our homes every day. It is essential that we reduce our energy consumption if we’re to prevent further climate change and keep our purse strings intact.
So in that spirit, here are a few energy-saving resolutions to consider for the New Year:
Upgrade your boiler – If your current boiler is more than ten years old, upgrading to a modern condensing model could easily slash your heating bills and emissions by a third.
Draught proof gaps – If you have poorly sealed windows and doors you may be losing a significant amount of heat through the gaps. Draught proofing is a simple inexpensive DIY measure and by saving warm air you’ll use less energy to heat your home.
Double glazing -Old single glazed windows can often be a major source of heat loss, so if you have them in your home, or even if you have broken or leaky double glazing it’s well worth considering modern energy-efficient replacements.
Time for a new thermostat – The latest thermostats are really clever, they can now learn how to program themselves based on your usage habits.
Replace old bulbs – Still using the old-school light bulbs? Switch them to energy saving light bulbs, you’ll save oodles on your bills.
Think – It may sound a little tired but it’s very important to remember that when you’re not in a room, you really should turn off your appliances to save energy. If you have children, ask them to follow this too.