Extract from an article written by James Robson, Founder of Powerful Allies, with Julian Ingram, Fellow of CIPS (Chartered Institute of Procurement and Supply).
The UK commercial energy supply market is huge, profitable, and uniquely competitive, but by any normal standard, the sale of energy is also an unregulated shambles with virtually no limit to the misleading sales techniques used. This has created many contradictions and risks, exposing clients to an epidemic of deliberately confusing offers. This should come as no real surprise, with a multitude of suppliers seeking to gain advantage over a competitor where their product is identical and price is the only battle ground.
And then we add an equally unregulated broker network, expanding rapidly as little broker clones head off to repeat the behaviour of their “parents”, where an array of deliberately deceptive and extraordinary behaviours, unacceptable in any other sector, have become the norm. Broker begets broker……
So it is perfectly understandable for a client, eager to establish a “level playing field” to seek to eliminate the one important variable which will always distort the review, namely timing.
We all know wholesale energy market rates change daily, and so it seems logical to assign a common presentation date for competitive suppliers or brokers to “provide the best price”. This way we are assured of a genuine “like for like” when comparing prices……surely?
Well, it can work when assessing offers direct from specific suppliers, although the date is often arbitrary and has no relevance to market forces. But it is not an acceptable way to assess which broker to work with, and invariably leads to a worse outcome for the client.
Sorry to burst the bubble, but the sector has some unique and bizarre quirks which effectively guarantee this “shoot out at sunrise” rewards deception, penalises transparency and produces a far more expensive final contract.
Underlying the problem are three simple facts.
With the same starting price from a supplier, it should be no surprise to learn that brokers will attempt to manipulate their rates by hiding, miscalculating, distorting or otherwise simply fabricating numbers. By the time clients have discovered this, the broker has run for the hills with a nice contract in their pocket.
So here it comes; 11 ways by which you as a client, may be deceived by multiple broker comparisons.
The Solution is easy really.
Above all, the objective is to secure the best deal from suppliers, and anything which detracts from this core focus is counterproductive.
If you doubt the honesty of the broker, and even if you do not;
Take very good time to assess references. Look at who they are working with, and ask who they have lost as clients.