Ofgem threatens changes

OFGEM has said that it will come down hard on supply companies which claim to have heavily-discounted deals online in order to get to the top of price comparison lists, when these deals are not intended to last.

The gas and electricity regulator has put together an Initial Findings Report on the energy market which warns of, "instances of differential pricing that are of concern".

The report outlines how suppliers seem to lure customers in with attractive offers which are not built to last in order to climb to the top of price comparison tables, the relevant suppliers told Ofgem that, "Customers acquired online are profitable over a number of years as prices are subsequently increased."

Yet Ofgem is concerned that this is not so apparent to customers and could deter potential competitors from entering the market.

These companies have an eight-week consultation period to deal with these problems - including much clearer information on offers and bills and an obligatory statement to voice any changes on offers to be sent annually.

If the companies do not comply with these requests, then Ofgem will have no choice but to use its almighty power to enforce them itself. µ

L'Inq
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