Collective Switching – the 2 questions you should ask

Collective energy switching has been greeted with a mixture of excitement, enthusiasm and cynicism by the public, the media, politicians and the energy industry.  According to respected consumer and research bodies like Which?, Consumer Focus, IPPR,  “rip offs” and “miss-selling” have been rampant in the energy industry and with money making potential in collective energy purchasing,  thePeoplesPower want consumers to ask 2 simple question before they sign up to any scheme.

Collective switching and purchasing should be about consumer empowerment – not a new way to rip off the unwary

Just 2 simple questions

As you look through the information on whatever collective switching site you are on (including thePeoplesPower) just keep these 2 questions in mind – we also give you some more pointers further down the page.

What’s in it for me?

 

What’s in it for the Switching Provider?

MPs, Ed Davey and DECC have been particularly keen to promote collective switching or collective energy purchasing.   This media attention and governmental support together with an industry reputed to have £4 billion in excess bills make this area particularly attractive to rogues and schisters trying to take a cut of this potentially lucrative market.  In this way a creation promoted to empower consumers could result in a new spate of mis-selling and profiteering.

“I believe collective purchasing and switching have huge potential to increase engagement in energy markets and ensure consumers get a fair deal” Edward Davey, Secretary of State for Energy and Climate Change

thePeoplesPower does not want to see any mis-selling scandals so please read our advice before you sign up to any collective switching scheme.

Note:  DECC are producing leaflets to help members of the public select appropriate schemes – this was one of the 3 commitments to come from the DECC collective purchasing workshops held in 20011/2012.  thePeoplesPower have passed these suggestions to DECC so we hope they will be included in the official advice. (see Ed Davey and DECC have been particularly keen to promote collective switching)

What’s in it for the Switching Provider?

Are they after your money? Do they want your details to use for marketing/campaigning/selling?

  • What organisation is behind the collective switch?
  • Are the terms and conditions clear before you sign up? (we think they should be in plain English)
  • Are your details going to be shared with anyone else?
  • Is there a money motive?  if so is it declared openly? Where will the money go?
  • Are they independent?

What’s in it for you?

Remember collective energy purchasing and switching is new – as far as we know there have been no examples in the UK in the retail area. (However the business sector has well established economies of scale and the model we are trying is well established in Holland, Belgium and Germany – where it has been shown to save money).

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  • no risk
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  • Will my information  be safe? (are there terms and conditions / privacy policies? Am I signing up to anything else?)
  • Will I have to accept a deal when it is offered?
  • Will I save money?
  • How much will I save? (beware of outlandish promises – it will depend on how good or bad your current deal is!)
  • How will I know whether to accept the offer?
  • Are there any other benefits to switching with this collective?
  • Is this an online only offer?
  • Do they offer the kind of energy offer I need (e.g. Green electricity)

Why thePeoplesPower stands up to the test

After asking you to ask all these questions it only seems fair to answer them all (all of the information below can also be found in the How it Works and About Us pages).

We are open about having an “agenda”

  • We are appalled by fuel poverty and want to reach people who have never switched before – especially those who are really struggling to pay their bills.  We are not ashamed of this and will continue to try and work with organisations like Housing Associations, Local Authorities, Advice agencies and other not for profits to try and help people.
  • We also want better competition in the energy market and simpler easy to understand bills.

We want a better deal for you AND  are not compromised by financial incentives

  • Because our switching fee is low AND we are a not for profit, we do not have a massive financial incentive to get you to switch with us if it isn’t a better deal for you. (Our referral fees are declared here)
  • There is nothing wrong with a commercial collective switching process – as long as it is openly declared.  Due to the lack of transparency in the energy sector, we think any collective switching service should be declaring their referral fees openly. Even though these services are free to a householder, one way or another a fee charged to an energy supplier is passed back to consumers.

We are committed to your privacy

  • We won’t be passing your details onto anyone without your permission.

We want a fairer and more transparent energy market

  • We  declared our referral fees when we launched and will keep this information open for scrutiny.  We have also committed to keeping our collective switching sizes big enough to get savings for you, yet small enough for the small energy companies to participate.

We will negotiate for simple easy to understand tariffs

  • We want people to be able to understand their energy bills easily so we will make every effort to ensure the tariffs we negotiate are simple and easy to understand.

thePeoplesPower is committed to communities and consumers

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  • its free
  • no obligation
  • no risk
  • not-for-profit

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Categories: Blog and Cheapest energy.