Five dirty tricks that affect us all

Robert Powell looks at five sneaky scams that energy companies try to pull on us....

As far as business models go, energy suppliers have a pretty captive market.

But it’s this dependency that all of us, to a certain extent, have on our energy provider that occasionally allows the provider to get away with murder on the price front.

So to help you save a few pounds on your gas and electricity bills, here are five dirty tricks that energy suppliers try and pull...

Bogus free gifts

As far sales scams go, the dodgy free gift is the oldest trick in the book. It works by tempting you in with the promise of a freebie or cashback, but the offer is only available on the most expensive tariffs. This means that the extra cash you eventually shell out on your hiked up utility bill comes to nowhere near to the amount saved through the free gift.

Just look at this table outlining the current freebies on offer from a variety of suppliers and how much they are actually worth when you consider the overall bill...

* Based on an average yearly bill for gas and electricity.

** M&S and Good Energy have no other tariffs so the cheapest and cheapest green tariffs available have been used.

Source: energyhelpline.com

As you can see, it’s rarely worth taking the freebie or cashback as you’ll ultimately more than pay it back in your overall utility bills. A far better bet is to find the cheapest energy tariff around and then head out and buy the freebie using the cash you’ve saved.

An identical trick is peddled by shops attempting to persuade customers to take out a store card. You’ll get tempted in with the offer of a 10% discount but then hit with a massive interest rate if you fail to pay off your bill in full each month. So if you have a store card lurking in your wallet, it could be time to switch. Read Ditch these rubbish credit cards - now to find out about all the latest credit card deals.

False sales techniques

Just last week Scottish and Southern Energy (SSE) became the first ever energy firm from the ‘big six’ to be prosecuted for the use of dishonest sales techniques.

SSE was found guilty at Guildford Crown Court on two counts of using misleading practices on potential customers between September 2008 and July 2009. The conviction related to the script used by doorstep salespeople, which claimed that customers were overpaying with their current energy supplier and could make massive savings by switching to SSE. In fact, the script showed no such thing but was cleverly designed to put customers on the back foot and force a sale.

Here at lovemoney.com, we’re always encouraging you to keep up to date with the latest energy tariffs so as to ensure you’re getting the best deal at all times. But it goes without saying; you can’t possibly get an accurate idea of whether you can save by switching if you don’t know what tariff you’re currently on. So if any slick salesperson does try to tell you how much you can save by switching with them, make sure you have your exact figures on hand to correct them if they start to get a tad imaginative with the costs.

Alternatively, if you are cold-called or doorstepped out-of-the-blue, just tell them to get lost and head over to our energy price comparison centre where you can get an accurate picture of all the best tariffs around at the moment.

Tariffs in a new home

Moving into a new home is stressful and expensive enough without having to worry about being ripped-off by your new energy supplier. But if you don’t look into your utility bills when you switch homes and just stick with the existing supplier; it’s more than likely that you’ll be overpaying.

This is because when occupiers move out of a property, the energy company shift the supply onto a standard tariff. These are usually around 25% more expensive than the cheapest available tariffs. So if you’ve recently changed homes, make sure you check what tariff you are receiving, and if it’s the standard rate, head to our utility centre and find a cheaper deal.

Standard tariffs switching

You don’t need to be a recent home mover to be caught out by standard rates - energy companies are shifting customers onto these pricey tariffs all the time. They are able to do this by including small print stating that their standard rate will be applied when a fixed tariff expires.

In fairness, they do have to inform the customers when their rate changes, but the notification is often hidden in a letter and easily missed.

Here are seven tariffs that all expired on 1 May...

Source: energyhelpline.com

So if you were signed up to one of these rates, there’s a good chance that you’re now on the supplier’s pricey standard tariff and could save hundreds by switching.

Rate hikes

Occasionally energy suppliers will abandon the subtle tricks of bogus gifts and covert standard price rises and just hike up rates for everyone. What’s worse is that these increases have a nasty habit of materialising just before the cold winter months set in. Late last year every major supplier upped their tariffs, adding hundreds of pounds onto the bills of millions of customers.

Until recently, energy suppliers have even been able to push through these price hikes without notifying customers, as they were only required to send out a confirmation of the change within 90 days of introducing it. Fortunately this unfair rule has been scrapped by OFGEM and energy suppliers are now required to give 30 days’ notice of any price changes, giving customers time to ditch and switch to a better tariff. Head to The secret trick you can use against your energy provider to find out more about stopping energy price rises and switching suppliers.

Other tricks

Have you ever been caught out by a sneaky energy scam?

If so, we want to hear about in the comment box below.

More: Compare energy tariffs at lovemoney.com | Why shopping at Tesco will cut your energy bill | Six ways to fight back against greedy energy companies!