Energy giants accused of taking customers for granted

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Britain's Big Six energy suppliers have been accused of taking for granted customers who overpay by around £1.7 billion a year in a long-awaited report by the competition watchdog.

Energy Secretary Amber Rudd said the Competition and Markets Authority report had delivered a "wake-up call" to the Big Six providers - British Gas, SSE, EDF Energy, npower, E.ON and Scottish Power.

The CMA's recommended reforms have gained a mixed response though four million households will see their gas and electricity bills slashed.

The authority published its "provisional decision on remedies" after a two-year investigation, outlining a range of proposals to promote switching in the industry and break the dominance of the largest suppliers.

The report's key proposals:

  • A price cap will be set for low income and vulnerable customers who have prepayment meters (around 16% of households) saving a total of £300 million a year.

  • Britain's Big Six will be forced to share customer data so that rivals can contact them directly and offer more competitive products.

  • An Ofgem-controlled database of disengaged customers will be created. Those on a standard variable tariff for more than 3 years will be listed, allowing rival suppliers to target their marketing to those customers.

  • The CMA also aims to "reset the relationship" between Ofgem, the Department of Energy and Climate Change (DECC) and the industry to make decisions more efficient and customers aware of their impact.

  • Other plans include rules ensuring bills are sent out more often and offer clearer information on alternative tariffs available.

But the CMA has scrapped plans first mooted last July to set a maximum price limit for standard variable rate tariffs, which would have seen prices cut or frozen for around 70% of customers with the Big Six providers.

Scroll down for more analysis of the report's leading findings

The standout figures from the CMA's report:

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Analysis of the report:

ITV News Consumer Editor Chris Choi tweeted his response to the report:

The mixed industry reaction to the report:

Energy Secretary Amber Rudd said the report had delivered a "wake-up call to the Big Six" that should help customers get a "fair deal".

The chief executive of OVO Energy though lambasted the report for causing more problems rather than helping customers.

ScottishPower's chief corporate officer, meanwhile, welcomed the move to better inform customers of the variety of deals on offer.

The chief executive of First Utility, the largest independent energy provider, welcomed the sharing of customer data but said protection was needed.

The CMA report claimed British customers were overpaying on energy bills by more than £1.7 billion a year. Credit: PA Wire

Shadow energy and climate change secretary Lisa Nandy warned energy companies are still being "let off the hook".

The head of Ofgem said the CMA's proposals should help deliver a "better deal for consumers" and make the market "more competitive and fairer" for consumers.

The chief executive of Green Energy UK said "radical" thinking was needed after a consultation process that may have led to "more mistrust" in the industry.

The founder of independent supplier Good Energy said the report's "good measures" will mean "customers get a better deal".

The chief executive of Energy UK said the industry is "committed to making things simpler and fairer for all" and the "need to put customers first".