Energy firms pull plug on best deals for loyal customers

ENERGY companies have been ripping off customers by offering tempting best-price deals to new customers – while withholding them from existing ones.

Savings ranging from £133 to £256 a year are being denied to loyal long-standing customers under the promotional deals aimed at luring people to switch supplier.

The startling discrepancies involve major companies including E.ON, EDF Energy, SSE and British Gas.

And while British Gas has now ended its cut-price offer to new customers, the selective deals are still available through other suppliers and experts expect new ones to appear.

The only company to say it will not offer better deals to new customers than loyal ones is ScottishPower, which condemned the practice.

Commercial director Colin McNeill said: ‘These tariffs must stop. To actively block these [existing] customers from switching to best prices does not seem fair.

‘We are still not a trusted industry, and perceived sharp practices do the industry no favours.’

Selective deals were banned in April 2014, following a spate of energy switching mis-selling scandals. Energy regulator Ofgem insisted tariffs offered on the open market should be available to both new and existing customers.

But in April, the Competition and Markets Authority recommended a change and Ofgem indicated it would no longer enforce the rule, which is now to be rescinded in November.

The belief was that ‘teaser’ offers would help give best value to consumers by encouraging more to switch supplier for better deals. Subsequently, companies created packages to woo new customers.

The change in power firm tactics is highlighted in tonight’s Money Box programme on BBC Radio 4.

Energy companies defended the practice. E.ON and EDF Energy confirmed they offered promotional tariffs but said their portfolios were under constant review to try to offer new and existing customers the best possible deals.

An SSE spokesman said the new customer tariff was ‘to drive further customer engagement in the energy market’. And British Gas said all current tariffs were offered to new and existing customers, and cheaper tariffs were displayed on every bill.