Comment: Unscrupulous energy utilities try to lock customers in at peak tariffs

The Daily Express today ran the headline " £100 OFF GAS BY CHRISTMAS" this predicted cut in gas bills comes after the wholesale cost of gas dropped 30 per cent from its summer peak. In a message of hope to households, TheEnergyShop.com said power giants should soon pass on these lower prices to their customers.

This headline came as no big surprise to me, since I had rather expected a falling off in gas prices after the summer peak in wholesale prices began to soften. While I have certain doubts over how swiftly utilities companies are likely to pass these savings on to customers since they are always quick to pass on costs but slow to pass back savings, I was surprised and concerned to receive a direct marketing call from British Gas around the time that wholesale prices started softening, aggressively pushing a pricing plan that would lock me into current gas rates at for the next year.

When I asked the sales person "what happens if gas prices go down?!" his only answer was "When did your gas bill last go down, this is an opportunity you should not miss - lock your prices in now". Despite my concern at the danger of locking in prices at peak level the sales person aggressively pushed this plan (the contract I discovered when I really pushed also including a £70 escape fee).

Call me cynical, but my concern is, that British Gas knew very well - far better we may reasonably presume than myself - that prices had likely peeked and were thus expecting downward pressure on rates, and were actively trying to lock customers in at peak level while they could. I never had an offer to lock prices before, but then prices were going up before. I happened to be on the whole informed thanks to the nature of my job, had I not been, I may very well have taken the guys point and locked myself in to a very disadvantageous deal and found myself unable to benefit from falling energy prices amidst a deepening recession.

This sort of shameless abuse of the inevitably often under informed customer seems to be relatively common practice across many service providers all of whom make extensive use of direct marketing campaigns. A consultation of other utility company web sites like EDF reveils that many are recommending fixed price plans.

I would be interesting to investigate further the direct marketing strategies of these firms in particular, and the consumer groups and demographics they are target ting.