New plans to make switching suppliers easier for consumers
New ‘Switching Principles’ set out what consumers should expect from providers when they switch.
Consumers should be able to switch their electricity or gas supplier, bank accounts, telephones, broadband or TV providers quickly, without charge and have the data on how they consume these services freely available, under new plans announced today (22 October 2015) by Business Minister Nick Boles.
The proposals form part of the new ‘Switching Principles’ which set out what consumers should expect from providers when they switch.
Consumers across the country are being invited to share their views on how switching could be improved, as well as sharing their own experiences as part of a government drive to make changing providers quicker and easier.
Research shows that currently more than three-quarters of UK consumers have never switched their mobile phone provider and more than two-thirds have never changed their broadband supplier.
Business Minister Nick Boles said:
By setting out clear principles for switching suppliers, this government will make it simpler and easier for consumers to shop around for the best deals.
All too often families miss out on hundreds of pounds of potential savings because they think it will be too complicated or take too long to switch.
Consumers have a key role to play in driving firms to be more competitive so we also want to hear from them and industry on how businesses can be more responsive to customers.
The Switching Principles
- switching should be free to the consumer unless they are aware of and have consented to reasonable restrictions and charges to do so
- the switching process itself should be quick, at an agreed date
- the switching process should be led by the organisation with most interest in making the switching process work effectively – the gaining provider
- consumers should have access to their consumption or transaction data. This should be in a format that can be easily reused (e.g. Midata) and they should be able to authorise third parties such as comparison sites to access their data to help them to switch
- sites and tools providing comparisons to consumers that receive payments from suppliers should make clear where this affects the presentation of results
- there should be an effective process for consumers to get redress if anything goes wrong in the switching process
Using the stories and experiences of consumers across the country, the government will work with regulators and industry to agree specific actions which are needed to implement the principles fully and make the switching process as straightforward as possible for consumers.
The government’s “Power to Switch” campaign recently revealed there is £2.2 billion worth of savings available to 11 million households in the UK if they simply switch their energy supplier.
Key facts:
Proportion of consumers who have switched services in the past 12 months
| Year | Electricity | Gas | Bank accounts | Fixed line | Mobile | Broadband | Digital TV |
|---|---|---|---|---|---|---|---|
| 2014 | 12% | 12% | 3% | 6% | 7% | 6% | 2% |
| 2013 | 12% | 12% | 5% | 9% | 11% | 9% | 3% |
| 2012 | 13% | 12% | 4% | 10% | 9% | 9% | 3% |
| 2011 | 17% | 15% | 2% | 8% | 9% | 7% | 3% |
| 2010 | 15% | 15% | 3% | 9% | 9% | 10% | 4% |
Source: The Consumer Experience of 2014 - Research report
Consumer opinions about ease of switching supplier, by ever and never switched
| % very or fairly easy | Digital TV | Mobile | Fixed line | Broadband |
|---|---|---|---|---|
| Ever switched | 92% | 90% | 89% | 85% |
| Never switched | 66% | 76% | 59% | 67% |
Source: Consumer engagement and switching - Statement
Notes to editors
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The call for evidence is open until 4 December 2015 and available at Switching suppliers – making it easy for consumers
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The government already has an ambitious programme of reforms to increase competition in banking. This includes helping to drive the delivery and support the continued success of midata and the 7 day Current Account Switch Service, which enable customers to compare which bank is best for them and to switch banks quickly and reliably.
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Due to government reforms there are now 31 energy suppliers in the market helping to drive competition, up from just 6 in 2010. To ensure we have a competitive and effective energy market for hardworking families and businesses our ambition is to move to 24 hour switching in 2018, helping bill payers switch faster and easier.
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The focus of this Call for Evidence is to understand how best to ensure adoption of these principles as the industry standard across energy, telecoms and current accounts. We would, however, also welcome any views and experiences of switching providers in other areas such as insurance, credit cards, savings and mortgages; sectors where customer engagement is generally higher but might also be improved through wider adoption of the principles.
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The principles form part of the government’s Productivity Plan
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The responses to the call for evidence will inform the government’s policy about options to help consumers be more active when it comes to switching.
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The principles, once adopted by industry, will help consumers to identify the best deal for them and to switch suppliers easily and quickly.
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For information on the Power to Switch campaign and how to compare deals visit BeAnEnergyShopper.com