How underhanded Big Six energy firms exploit loyal families and make UK customers pay more

THE greedy Big Six energy firms us a raft of sneaky tricks to help them boost profits.

Combined, these add up to a profit increase of billions of pounds – but this may not last much longer.

PM Theresa May signalled this week she would not put up with money-grabbing firms exploiting customers.

She will need to target the biggest companies – British Gas, EDF Energy, SSE, npower, E.on and ScottishPower – if she wants to make a real difference to British consumers.

Here, HARRIET COOKE and DANIEL JONES examine ten key areas Mrs May must look at if she is to stop Brits being ripped off.

❶ OVERCHARGING FAMILIES

Some are paying a record £400 over the odds every year by being deliberately kept on pricier tariffs.

New research by The Sun shows SSE cash-paying customers overpay the most, with bills averaging £389 more than its cheapest rate.

Npower’s cash-paying customers on standard rates are overpaying by as much as £370 and ScottishPower’s by £342.

For those who pay by direct debit, the difference between the firms’ cheapest deals and their standard rates is £272.

Research by the Competition and Markets Authority (CMA) this year found 70 per cent of Big Six customers were wasting money on “default” standard variable rates.

❷ BEST DEALS HIDDEN FROM EXISTING CUSTOMERS

Five major suppliers have barred their own customers from taking out the cheapest deals.

E.on, SSE, British Gas, npower and EDF Energy have in recent months introduced tariffs for new customers only, preventing existing customers from saving as much as £389.

Will Hodson, of consumer collective TheBigDeal.com, said it was “a new low” for the Big Six. Such deals were banned by regulator Ofgem in 2014 but are now allowed after the CMA stepped in this year.

❸ PREPAYMENT METERS

As Britain’s poorest energy customers, they are being charged up to £4.65 a week more than those who do not pay up front.

Suppliers offer just a handful of expensive tariffs to prepayment customers.

Industry figures show even the cheapest prepayment tariff is £242 more expensive than the cheapest fixed deal on the market.

The cheapest available rate on the market is for a fixed tariff at £744 a year, while the cheapest prepayment rate is £986 a year. The average Big Six tariff for a prepayment meter is even higher, at £1,137.

Earlier this year the CMA said those who pay up front “get the raw end of the deal”.

Watchdogs have called for a prepayment cap to be brought in immediately.

❹ DELAYING PRICE CUTS

Energy firms raked in around £90million by delaying making price cuts earlier this year.

The big suppliers waited until last winter was over before lowering prices after a slump in wholesale costs.

For British Gas, delays in passing on savings to 6.8million of its customers helped them make an extra £39million.

SSE forced customers to wait even longer – 61 days. It announced a 5.3 per cent cut in January but it was not introduced until March 29. The delay made it an extra £21.6million.

Also said to have profited were npower (£10.7million), ScottishPower (£7.2million), EDF (£6.3million) and E.on (£5million).

❺ POSTCODE LOTTERY

Bills are subject to a postcode lottery which sees some families paying £50 more than others.

Analysis for The Sun in February showed Scots paid £54 LESS for their gas and electricity than Liverpudlians.

Those who live in Glasgow, Edinburgh and the rest of southern Scotland paid an average of £1,066 a year for fuel from the Big Six. Families in North Wales and Merseyside were charged £1,120 for the same amount of energy.

The second-most expensive region is the South West, including Bath, Bristol and Exeter, where families pay £1,115 a year.

Campaigners have urged equal pricing no matter where you live.

❻ BILLING ERRORS

Almost four million customers were overcharged £72 on average in the past year because of mistakes made by their providers.

Comparison company uSwitch found billing errors were the main cause, with problems including bills that didn’t match submitted meter readings.

Many of those affected struggled to get their money back and nine per cent were still waiting to be paid back.

The most common error was being charged for the wrong tariff or product.

Last December npower was ordered to pay out £26million over billing issues that had affected more than 500,000 people.

ScottishPower received a hefty fine of £18million this year.

❼ EXPLOITING CASH-PAYING PENSIONERS

At least seven million households a year pay by cash or cheque. Many of them are elderly customers.

Those who pay by cash or cheque face bills of around £79 a year more than direct debit customers.

The Sun found Big Six customers on standard tariffs will typically pay £1,142 a year for their energy if they pay by cash or cheque, but just £1,063 if they set up automatic payments.

Will Hodson said: “Given that consumers often build up large amounts of credit with their suppliers – about £1.5billion every year – it’s fair they should be allowed to check before they pay. Being charged nearly £70 extra for that privilege is a kick in the teeth.”

❽ PRICE COMPARISON WEBSITES

Supposedly independent price comparison sites such as uSwitch, Confused and GoCompare were found to be hiding the best deals in a series of Sun investigations.

As a result they were ordered to show customers all available tariffs.

Our probe exposed how they were taking kickbacks for pushing certain deals, while concealing better ones.

But in August Ofgem endorsed proposals by the CMA to revert to the old system of deal-hiding. Both claim it would encourage the sites to offer more competitive deals.

Furious campaigners and MPs argue shoppers could be misled.

Will Hodson said: “It must not happen.”

❾ CONFUSING BILLS

Gas and electricity bills baffle six in ten Brits, new research revealed earlier this year.

Energy companies were named the worst offenders for sending confusing bills in a survey by uSwitch, ahead of water companies, mortgage lenders and councils.

Despite reforms in 2014 to make energy bills easier to understand, almost half of 2,000 people surveyed said they had not noticed any difference.

Ann Robinson, of uSwitch, said: “The confusion must be tackled. Customers could be missing out on better deals.”

❿ COMPLAINT HANDLING

The Big Six handle customer complaints so poorly that more than half of complainants switch provider, Ofgem found last month.

The number of complaints has halved since 2014 but the level of satisfaction with how problems were handled has fallen.

The poorest performers were npower and ScottishPower but even the suppliers that fared best – SSE, E.on and EDF Energy – failed to show any significant improvement in overall complaint handling in two years.

Npower was named the worst, with the proportion of “very dissatisfied” customers rising from 43 per cent to 67 per cent.

Ofgem boss Dermot Nolan has written an open letter to all the suppliers surveyed to demand their service improves.