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You can find the current article at its original source at http://www.theguardian.com/business/2016/mar/10/competition-regulator-energy-market-plan-junk-mail-overcharging-customers
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| Competition regulator's energy market plan 'will lead to junk mail deluge' | Competition regulator's energy market plan 'will lead to junk mail deluge' |
| (35 minutes later) | |
| The competition watchdog has been warned that proposals to give energy suppliers access to a new industry-wide database of customers could unleash a junk mail deluge. | The competition watchdog has been warned that proposals to give energy suppliers access to a new industry-wide database of customers could unleash a junk mail deluge. |
| The plan was one of several remedies proposed by the Competition and Markets Authority to reform an energy market in which households are overcharged £1.7bn a year. | The plan was one of several remedies proposed by the Competition and Markets Authority to reform an energy market in which households are overcharged £1.7bn a year. |
| Related: Big six's hearts warmed by watchdog as standard tariff payers left out in cold | |
| Martin Lewis, founder of website MoneySavingExpert, said: “The great worry is that people will be bombarded with what feels like spam from so many companies, the [switch to a cheaper provider] message will be drowned out by shouting.” | Martin Lewis, founder of website MoneySavingExpert, said: “The great worry is that people will be bombarded with what feels like spam from so many companies, the [switch to a cheaper provider] message will be drowned out by shouting.” |
| Other measures outlined by the CMA on Thursday included the introduction of a price cap for four million customers on pre-payment meters, as well as removing a tariff cap that restricts suppliers to offering four price rates. | Other measures outlined by the CMA on Thursday included the introduction of a price cap for four million customers on pre-payment meters, as well as removing a tariff cap that restricts suppliers to offering four price rates. |
| However, the most eye-catching proposal was the creation of a database that would be controlled by the industry regulator, Ofgem. Under the plan, if a customer has been on a standard variable tariff – the more expensive default rate – for three years or more they will receive a letter from Ofgem informing them that they will be put on this open database, unless they opt out. The other 36 suppliers in the market can then contact the customer directly to offer better deals, potentially leading to a raft of marketing letters. | However, the most eye-catching proposal was the creation of a database that would be controlled by the industry regulator, Ofgem. Under the plan, if a customer has been on a standard variable tariff – the more expensive default rate – for three years or more they will receive a letter from Ofgem informing them that they will be put on this open database, unless they opt out. The other 36 suppliers in the market can then contact the customer directly to offer better deals, potentially leading to a raft of marketing letters. |
| Paul Hunt, an energy consultant, said: “Ofgem will have control of this database of disengaged customers to which all competing suppliers will have access. I’m not looking forward to being bombarded with loads of junk email and snail mail from the competing suppliers.” | Paul Hunt, an energy consultant, said: “Ofgem will have control of this database of disengaged customers to which all competing suppliers will have access. I’m not looking forward to being bombarded with loads of junk email and snail mail from the competing suppliers.” |
| Roger Witcomb, head of the CMA investigation, insisted the “coherent and comprehensive package of reforms” would transform the energy sector. | Roger Witcomb, head of the CMA investigation, insisted the “coherent and comprehensive package of reforms” would transform the energy sector. |
| He added: “In those parts of the retail markets where competition is working, customers are benefiting to the tune of hundreds of pounds a year by switching. We’re proposing a wide range of bold, innovative measures to enable competition to grow further across the market so that millions more households will benefit.” | He added: “In those parts of the retail markets where competition is working, customers are benefiting to the tune of hundreds of pounds a year by switching. We’re proposing a wide range of bold, innovative measures to enable competition to grow further across the market so that millions more households will benefit.” |
| The proposals in the CMA report will be followed by a final verdict before 25 June. Amber Rudd, the energy secretary, and a host of business organisations also welcomed the planned changes. But some opposition MPs, independent energy companies and fuel poverty groups have expressed scepticism. | |
| Related: UK watchdog accused of bowing to pressure from 'big six' energy suppliers | |
| Ovo Energy, one of the new breed of suppliers, said the lengthy investigation by the CMA had been “a complete waste of time and taxpayers’ money”, while Lisa Nandy, the shadow energy secretary, said the latest remedies represented a missed opportunity. | Ovo Energy, one of the new breed of suppliers, said the lengthy investigation by the CMA had been “a complete waste of time and taxpayers’ money”, while Lisa Nandy, the shadow energy secretary, said the latest remedies represented a missed opportunity. |
| “This investigation has confirmed that millions of families and businesses have been overcharged for their energy bills to the tune of billions of pounds yet energy companies are still being let off the hook,” she said. “This was a critical chance to shake up a broken energy market and make sure savings from falling wholesale prices are passed on to customers. Only more transparency and competition can deliver this.” | “This investigation has confirmed that millions of families and businesses have been overcharged for their energy bills to the tune of billions of pounds yet energy companies are still being let off the hook,” she said. “This was a critical chance to shake up a broken energy market and make sure savings from falling wholesale prices are passed on to customers. Only more transparency and competition can deliver this.” |
| Steve Thomas, a professor of energy policy at the University of Greenwich, said the competition watchdog’s remedies would not prevent UK consumers being unnecessarily subjected to some of the highest energy bills in the EU. | Steve Thomas, a professor of energy policy at the University of Greenwich, said the competition watchdog’s remedies would not prevent UK consumers being unnecessarily subjected to some of the highest energy bills in the EU. |
| “The CMA report has failed to tackle what really concerns consumers: the UK is supplied by a cosy group of six companies who know very well without the need to collude that the last thing they need is the price war that real competition would lead to. The CMA measures will do little to change this,” he said. | “The CMA report has failed to tackle what really concerns consumers: the UK is supplied by a cosy group of six companies who know very well without the need to collude that the last thing they need is the price war that real competition would lead to. The CMA measures will do little to change this,” he said. |
| Laura Hill, for campaign group Fuel Poverty Action, said: “Today’s announcement is a testimony to the stranglehold of the ‘big six’ over this investigation. Extensive lobbying has resulted in these pathetic watered-down recommendations which will have little impact on the majority of hard-pressed households who have spent the winter shivering in their home.” | Laura Hill, for campaign group Fuel Poverty Action, said: “Today’s announcement is a testimony to the stranglehold of the ‘big six’ over this investigation. Extensive lobbying has resulted in these pathetic watered-down recommendations which will have little impact on the majority of hard-pressed households who have spent the winter shivering in their home.” |
| The CMA inquiry, launched in June 2014, was intended to clear up once and for all whether the so-called big six suppliers - SSE, Scottish Power, British Gas, npower, E.ON and EDF Energy – were abusing their dominance of the market. | The CMA inquiry, launched in June 2014, was intended to clear up once and for all whether the so-called big six suppliers - SSE, Scottish Power, British Gas, npower, E.ON and EDF Energy – were abusing their dominance of the market. |
| However, the regulator has retreated from more radical proposals amid ferocious lobbying from the energy sector. | However, the regulator has retreated from more radical proposals amid ferocious lobbying from the energy sector. |
| Shares in British Gas’s owner, Centrica, rose slightly on Thursday as the City realised the proposed changes would not have a severe impact. | Shares in British Gas’s owner, Centrica, rose slightly on Thursday as the City realised the proposed changes would not have a severe impact. |
| Related: Energy report Q&A – what it means for you | |
| Iain Conn, the chief executive of Centrica, said: “We believe that, provided they [the CMA remedies] are implemented thoughtfully, the majority will benefit our customers. We will work through the full report once we have it and submit a formal response in line with the required timetable.” | Iain Conn, the chief executive of Centrica, said: “We believe that, provided they [the CMA remedies] are implemented thoughtfully, the majority will benefit our customers. We will work through the full report once we have it and submit a formal response in line with the required timetable.” |
| The big six have always argued the market is highly competitive and the profits are proportionate to the risks they take. | The big six have always argued the market is highly competitive and the profits are proportionate to the risks they take. |
| Rudd described the CMA proposals as “a wakeup call to the big six.” She added: “Energy customers should get a fair deal from a market that works for them. That’s why we called for the biggest ever investigation into the energy market and won’t hesitate to take forward its recommendations. | Rudd described the CMA proposals as “a wakeup call to the big six.” She added: “Energy customers should get a fair deal from a market that works for them. That’s why we called for the biggest ever investigation into the energy market and won’t hesitate to take forward its recommendations. |
| “This report goes hand in glove with everything this government is doing to deliver a fair, competitive energy market that puts the families and businesses paying the bills first and the power back in their hands.” | “This report goes hand in glove with everything this government is doing to deliver a fair, competitive energy market that puts the families and businesses paying the bills first and the power back in their hands.” |