Energy firms 'ripping off' loyal customers, probe finds

Customers who stay loyal to their energy supplier for years are being ripped off by energy firms who routinely charge them up to £234 more a year than those who switch, an investigation has found.

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Loyalty doesn't pay when it comes to energy bills

The main suppliers, known as the Big 6, control 90% of the UK's energy market today stand accused of making a huge profit from the less well off.

The investigation, by the Competition and Markets Authority, found millions of dual-fuel customers, many of whom have never switched suppliers, have missed savings of up to £234 a year.

ITV News Consumer Editor Chris Choi reports on why loyalty doesn't pay.

Which?: Politicians are wrong competition isn't working

Richard Lloyd, Executive Director at Which? told ITV News that the report is: "a damning indictment of how competition is letting customers down. It's proved that the politicians are wrong to hope that competition will fix the massive problems in the energy market."

This report only sets out some early findings, what it doesn't do is set up is what the authorities are going to do to fix this market for consumers. We need to see much tougher intervention to protect, in particular vulnerable people, that are being charged well over the odds.

– Richard Lloyd, Which?

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Growing gap between energy firms costs and bills

ITV News' Consumer Editor Chris Choi says a chart released by the Competition and Markets Authority, as part of its update on pricing in the energy sector, seems to be the "smoking gun" that shows the growing separation between costs for companies and what they charge customers.

A chart released by the Competition and Markets Authority shows a growing gap between costs and charges. Credit: Competition and Markets Authority

Energy Secretary: Switch suppliers and save money

Energy Secretary Ed Davey told energy consumers to switch suppliers and save money. Credit: Danny Lawson/PA

Energy Secretary Ed Davey has reiterated his advice to energy consumers to "shop around for a better deal, switch suppliers and save".

Mr Davey was responding to an update from the Competition and Markets Authority into pricing in the energy sector which said loyal customers could save up to £234 by switching.

The CMA is looking at whether consumers get a fair deal from energy companies - and that’s exactly why we’re backing their investigation. We’ll be looking at their initial report in detail.

“The thrust of the report seems in tune with the action we are already taking to drive competition in the energy sector. Our reforms to the market have all been about greater choice, backing new firms challenging the Big 6 and putting pressure on energy companies to put their customers first.

“My message for consumers is the same as these early findings - don't stick with a supplier if you're not satisfied – now’s the time to shop around for a better deal, switch suppliers and save.”

– Energy Secretary Ed Davey

People switching energy suppliers is at 'all time low'

An update on the investigation by the Competition and Markets Authority into the energy sector has found that the number of people switching suppliers is at an 'all time low' despite the potential savings.

However ITV News' Consumer Editor Chris Choi said the CMA report offers no ideas on how this issue can be addressed.

Labour: Energy pricing report confirms sector is broken

Labour's shadow energy secretary Caroline Flint said the energy market is 'broken'. Credit: Rui Vieira/PA

Labour's shadow energy secretary Caroline Flint said an update by the Competition and Markets Authority into pricing in the energy sector which criticises the amount loyal customers are charged, proves "Britain's energy market is broken".

She added: "Radical action is needed to protect consumers. Energy bills are £300 a year higher under the Tories, and David Cameron has let the energy companies get away with overcharging millions of consumers.

"That's why the next Labour Government will freeze energy prices until 2017, so that bills can fall but not rise, give the regulator the power to force energy suppliers to cut their prices and end overcharging once and for all."

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Energy firms 'ripping off' loyal customers, probe finds

A competition probe into the energy sector has found that 95% of dual fuel customers who stay loyal to the Big Six firms are routinely charged up to £234 more a year than those who switch.

The Competition and Markets Authority (CMA) revealed part of its findings into pricing in the sector today, after an official inquiry began last year following a referral by Ofgem in light of soaring household bills and increased public distrust.

The Competition and Markets Authority (CMA) is due to reveal part of its findings today Credit: PA

The CMA's full provisional findings will be published in May, but a summary of evidence gathered to date was released today.

The update revealed that the vast majority of customers who receive all their energy from one supplier could have saved as much as £234 a year between 2011 and 2014 if they had switched firms.

This affects the some 40 to 50 per cent of people who have stuck with the same supplier for more than a decade.

Evidence from the probe also supports the suggestion that the so-called Big Six companies "segment the market and price discriminate".

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