Once again customers are being urged to switch energy supplier to take advantage of the cheapest deals. It’s good advice.
Switching numbers are increasing as so-called ‘white label’ brands enter the market. Some are apparently supplied by familiar names like supermarkets and some are startups, what they share is that they are supplying power under an existing energy company’s supply licence.
As the industry is charged with increasing competition, some questions arise around the growth of white label products.
Questions around white label products:
Suppliers are required to tell customers on their bills whether they are on the supplier’s cheapest tariff. What if the cheapest tariff under the supplier’s supply licence is a ‘white label’ product?
Should suppliers be required to tell customers the cheapest tariff available under their licence, or just under their brand?
Suppliers who provide white label operations should have data that enables the customer to be switched between products in a day or two – not a week or two – as they do not have to transfer details using inter-company procedures.
Should white label suppliers be offering fast switching from their associated energy supplier, and is that an incentive to switch?
Meanwhile, regulator Ofgem is considering the detail on how to set up a database of ‘sticky’ customers who lose out because they have not switched supplier for several years (as required by the CMA).
Switching numbers are generated from meter registration data. When the customer switches supplier the meter point registration is transferred from one supplier to another (one of the cumbersome processes that make switching supplier so slow). But as it turns out, engaged customers can make switching decisions that happen without transferring registration, especially in a situation where licensed suppliers run ‘white label’ brands.
Questions on the sticky customer database:
What happens if a customer transfers from one tariff to another but does not switch supplier? If there is no change of registration it will not be recorded as a switch.
A switching customer could end up on the ‘sticky customer’ database. Are new forms of reporting required?
What happens when customers transfer to, or from, a supplier to a ‘white label’ product where both are operated under the same supply licence? There will be no change of registration and it will not be recorded as a switch.
A switching customer could end up on the ‘sticky customer’ database. How can that switch be recorded?
What happens when a ‘white label’ supplier switches its business (and all its customers) to a new parent supplier? Registration data will deem the customer to have switched – but the customer has not.
An unengaged customer may not appear on the ‘sticky customer’ database and miss out on offers. How will that apparent switch be ‘subtracted’ from switching figures?
Suppliers have two years before the ‘sticky customer’ database will come into operation.
How many suppliers will be able to launch standalone companies with their own supply licence and transfer significant customer numbers to the new brand in the period?
As Ofgem considers how to set up the new database, and as white label suppliers expand – what other questions should customers be asking?