Energy companies urged to make bills clearer

Energy retailers have been urged to simplify the language used in consumer communications after a survey found the majority of customers (76%) are confused by their bill.

Consumer group Which?’s research found almost half (48%) of all consumers said they experience a negative emotional response when reading their bills.

The research that almost half (47%) said they find it stressful and a similar number (49%) said it makes them feel anxious – this stress is even more common when energy bills are unclear.

With energy bills a source of worry for many during the cost of living crisis, it is really important customers are able to understand what they are being asked to pay and why, so that they can know how to balance their budgets and feel confident that their bills are accurate.

To test how well people understand their current bills and see how energy firms can improve their communications, the consumer champion gave more than 2,000 consumers a ‘control’ correspondence about a direct debit increase – based on emails and letters currently being sent out by energy firms – or an improved ‘test’ correspondence – engineered by Which? to be more comprehensible – to see which performed best.

Which?’s ‘test’ communications about an upcoming direct debit change contained a few key features to help make it easier to understand – such as using simple language, clearly explaining why the direct debit amount needs to change and using a personalised graph of the consumer’s energy usage.

The consumer champion’s research found that presenting information in a clearer way improved people’s understanding of their bill. Almost half (45%) of consumers who received Which?’s improved communications answered a set of comprehension questions correctly – compared to just a quarter (27%) of those who saw the mock control communication.

Two-thirds (65%) of those who received Which?’s ‘test’ correspondence explaining the direct debit changes completely understood why the change was needed. This compares to half (48%) of those who saw existing communications – a significant improvement.

Consumers who did not receive any explanation were much more likely to challenge the change – four in 10 (38%) said they would challenge it compared to three in 10 (28%) of those who received Which?’s test explanation.

At a time when customer services are already under increasing pressure as a result of the cost of living crisis, making this simple change could help energy firms reduce their call waiting times and customer complaints.

The consumer champion’s research found that clearer energy bill communications also reduce people’s anxiety around their bills and improve trust in their provider. Of the consumers who found the messages from their provider easy to understand, four in 10 (41%) reported finding their energy bills stressful. This almost doubled to seven in 10 (70%) for those who said their energy communications were difficult to understand.

Similarly, three-quarters of consumers (74%) who found their bills unclear reported that they did not trust their energy provider, compared to just three in 10 (30%) of those who find their bills clear.

Which? believes that these findings offer energy companies an important opportunity to learn from the energy crisis and improve their communications and relationship with their customers going forwards.

Which? recommends that energy firms change their billing and direct debit communications to include: simple language, a clear explanation of how direct debits work and why any change is needed, a personalised energy usage graph, clear explanation of what action is needed from the customer and consider readability – for example, by highlighting key information in bold.

Rocio Concha, Which? Director of Policy and Advocacy, said “Our research has found that how energy firms communicate with their customers really matters – and can completely change how people feel about both their bill and their provider.”

“Changes such as using simple language and clearly explaining why direct debits are changing – could help to reduce consumer’s stress and anxiety when reading their bills, improve trust in energy companies and reduce customer queries.”

“Which? is calling on energy providers to take this opportunity to make their bills as clear and simple as possible.”