A coalition comprising consumer organisations and energy firms has called on Ofgem to reassess its plan to remove the ban on acquisition-only energy tariffs.
The coalition, which includes Which?, E.ON, Octopus, So Energy, Rebel Energy, the End Fuel Poverty Coalition, Citizens Advice and Fair by Design, has expressed worries about the impact on existing customers who could face higher costs if they are unable to access competitive deals typically offered to new customers or switchers.
Ofgem has proposed lifting the ban from 1st October 2024, prompting concerns that loyal customers might be disadvantaged.
The coalition argues that such a move could lead to loyalty penalties and further complicate matters for customers in debt who may find it challenging to secure better deals with their current supplier.
Recent research conducted by Which? shows widespread public opposition to exclusive deals for new customers.
The survey indicates that a significant majority of consumers perceive these practices as unfair, regardless of potential short term benefits.
In their joint letter to Ofgem, the coalition emphasises the lessons learned from the collapse of over 30 suppliers who offered unsustainable tariffs, leaving behind substantial unpaid energy costs that were eventually passed on to consumers through higher bills.
The coalition advocates for Ofgem to prioritise fair competition and enhance trust between suppliers and consumers.
They stress the importance of maintaining a balanced approach that supports both new customer acquisition and existing customer retention without disadvantaging either group.
A spokesperson for Ofgem told Energy Live News: “We are grateful to the consumer groups and stakeholders for their response to our statutory consultation.
“We appreciate the strength of feeling on this issue and will carefully consider all perspectives in the coming weeks to inform our final decision.”
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