A new report commissioned by Ofgem and the Gas and Electricity Markets Authority (GEMA) has indicated that consumers need more clarity in the language used on their utility energy bill.
The report titled The Sustained Engagement in the Energy Market surveyed 30 respondents with a range of switching experiences with both tariffs and suppliers from a mixture of geographical areas across Britain.
Consumers from a range of backgrounds were surveyed, from the “very engaged” to those with much less engaged strategies.
“Ongoing switchers” feel more confident about their predicted return on invested effort taken to switch. “Lapsed” switchers meanwhile lack this confidence, and report a number of (seemingly obvious) barriers to remaining engaged.
The report found that these reported barriers are driven by several underlying factors – previous experience with the market, assumptions and myths about the market, and the tendency to post-rationalise excuses for disengaged behaviour.
By tackling these underlying barriers, the report says, there are opportunities for encouraging sustained engagement that are rooted in increasing motivation and reducing perceived effort of ongoing switching.
The report recommended that people need to be helped to understand the meaning of different definitions used in bills to “better inform their awareness and choices” and recommended reframing the standard variable tariff (SVT) to show consumers it is “considerably different” and “less convenient” than a fixed tariff, to give the clear idea of its cost.
It also recommended that the industry regulator should address the myths and communicate that its role is to ensure competition and safeguard consumers rights.
Furthermore it recommended that consumers should be provided with strategies to navigate the options available to make choice “less daunting”.
In response to the report chief executive and chief ombudsman at the Energy Ombudsman Matthew Vickers, said: “The report’s recommendation on ensuring clarity in bills is definitely something we would echo.”
“Most of the complaints that come to us are about billing – it’s still by far the biggest driver of unresolved complaints.”
“We’re currently handling around 2,300 billing complaints every month.”
“Our message to energy companies is that billing isn’t just a back-office function. It’s your most important customer touch point and therefore represents an opportunity to build brand loyalty and improve customer retention rates.”