Collective switching first hit the scene in May 2012. The generic concept is that a trusted intermediary or local agency, such as a council, negotiates a deal with an energy supplier, then gets people to switch.
The idea is great in principle, but in practice so far most collective switches haven’t come up with market-leading deals. Plus, it’s not easy to compare the results to what’s on offer on the rest of the market, so a comparison site wins almost every time.
But we’re attempting to change that. With 1.2 million Cheap Energy Club members we’re in the perfect position to tackle the energy providers and try and haggle a market-leading deal. We’ll then show it alongside the results of our whole of market Cheap Energy Club so you’ll know if it’s definitely the cheapest tariff for you.
It won’t be easy – so far when we’ve tried to negotiate with big suppliers they have been unwilling to offer anything decent without imposing terrible conditions such as "you can’t then contact consumers for three years after the cheap fix ends to tell them to switch again" but hopefully the tide is turning.
While we very much hope this will work, if suppliers don’t come up with worthwhile offers, we won’t recommend them to you by publishing them on the site.
Energy regulator Ofgem’s rules say we have to publish our intent to run a collective switch so that all interested providers can take part, and that we must include the criteria we’re looking for. So here’s a rundown of what we’re asking and the process we intend to use…
What tariffs are we looking for?
There will be a number of categories that suppliers will be able to bid for:
- Auction 1: The cheapest market-leading 12 month fix.
- Auction 2: The cheapest long-term fix of three years or more.
- Auction 3: The cheapest green fixed tariff.
- Auction 4: The cheapest prepay fixed tariff.
How will it work?
- Step 1: Suppliers will submit their bid on auction day. They can enter more than one category.
- Step 2: MoneySavingExpert will assess the offers. In the event suppliers offer a similar bid, those suppliers will have the the opportunity to undercut further.
- Step 3: MoneySavingExpert will choose the winning bid in each category.
- Step 4: Once the winning bid has been determined, it will be uploaded to the Cheap Energy Club Collective Switch page so users will be able to compare it alongside all other tariffs available on the market.
- Step 5: New and existing Cheap Energy Club users will have 10 days to apply for the collective switch tariffs.
What criteria must the tariffs meet?
- The tariffs must be the cheapest on the market at the time of the collective switch.
- It’s preferred that exit fees are not attached to any of the tariffs, though they will be considered alongside their other merits. For example, if a tariff is particularly cheap, exit fees will be less of an issue.
- Credit meter tariffs must be available across dual fuel and also single electricity and Economy 7.
- Users must be able to pay by direct debit, except those with a prepay meter.
- Tariffs must be available to new and existing customers.
- Suppliers must provide a bespoke MoneySavingExpert email address and telephone number to deal with any customer service issues. Suppliers must agree to resolve any issues on the basis of fairness, not just law. We would require the winning supplier to sign up to a guarantee that bills will be issued and billing errors will be resolved promptly.
Please let us know your opinions in the discussion below or in the forum.
FAQs for suppliers
Q. Will you contact users when this deal ends?
A. We will contact users that join Cheap Energy Club during the collective switch in exactly the same way we contact other Cheap Energy Club members, meaning we will alert them when they can save by switching to a new tariff.
Q. Who will be able to sign up for the collective switch tariffs?
A. Existing members of Cheap Energy Club, as well as anyone joining during the 10 days that the collective switch is open.
Q. Can we offer an added freebie and how will you factor this into your decision?
A. Yes, you can. Preference will be given to a voucher for a large high street store (or even better, more than one store). If an alternative incentive is offered, eg, an energy monitor, we will make an assessment on its worth based on the going price.
For example, if an energy monitor’s RRP is £40 but it’s available for £20, we would assess it based on the cheapest price it’s available at. The incentive needs to be significant and have a wide appeal — a free hotel stay for use on 1 February in Timbuktu won’t be received well.
Q. How will you tell your users about the collective switch?
A. We will be sending a special email to existing Cheap Energy Club users and mentioning this in the weekly money tips email.
Q. Can we have a cap on the number of people that can sign up to our tariff?
A. Yes. If there is a limit to the number of people you can offer the deal to, that’s fine provided we’re able to tell users clearly what the limit is and when that cap has been reached.
Q. Will there only be one winning tariff per category?
A. We will choose more than one tariff per category if the winning tariff has a cap on the number available.
Q. Will this tariff be available elsewhere?
A. No, this is a MoneySavingExpert.com collective switch so the tariff will only be available via MoneySavingExpert’s Cheap Energy Club.
What are your views on collective switching? Please let us know your opinions in the discussion below or in the forum.