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Energy companies may get junk mail subsidy

10th March 2016

The Competition & Markets Authority has today published a report into the dodgy energy market. As always, they want people to keep switching energy supplier, and they're disappointed that lots of people don't take up hopelessly complicated offers. So much so that one of the proposals they've come up with it is to compile a database of Disengaged Domestic Customers and to liberalise access to customer data.

They sure know their marketing speak – what they're saying is that they want to give (for free) the personal details of people who don't switch often enough to energy companies so that they can then target you with unsolicited marketing. Here are the relevant bullet points from the report:

Ofgem-controlled database of ‘disengaged customers’

  1. Around 70% of the customers of the Six Large Energy Firms are on the standard variable default tariff – ie a tariff that, for many, they did not actively choose. In our provisional findings report, we found that over 30% of the standard variable tariff customers of the Six Large Energy Firms had been on the standard variable tariff with the same supplier for more than five years.
  2. In order to enable suppliers to prompt domestic customers of rival suppliers on default tariffs, our proposed remedy would require energy suppliers to disclose certain details of their domestic customers (on any meter type) who have been on their standard variable tariff (or any other default tariff) for three or more years (the ‘Disengaged Domestic Customers’) to Ofgem, and would recommend that Ofgem retain, use, and disclose this data (via a centrally managed database) to rival suppliers. The Disengaged Domestic Customers would have the option to opt out of the disclosure process at any point in time.
  3. The aim of the proposed remedy would be to enable rival retail energy suppliers to identify the Disengaged Domestic Customers that have not opted out and prompt such customers to engage in the markets. The ultimate aim of this proposed remedy would be to partly address two of the features identified in the provisional findings report giving rise to the Domestic Weak Customer Response AEC (and resulting detriment), ie that domestic customers have limited awareness of, and interest in, their ability to switch energy supplier and that domestic customers face actual and perceived barriers to accessing and assessing information.
  4. We recognise that there is a trade-off between the benefits of liberalising channels of engagement and the need to protect customers from excessive and/or misleading marketing. In respect of each of our proposed remedies to liberalise access to customer data, such data will only be available if customers actively choose to make it available (except in relation to communication with customers on the default tariff database, where customers will still have the right to opt out beforehand, and will only be contacted by post unless the customer agrees otherwise).
  5. Any communications from suppliers will be subject to standards regarding the form they must take to ensure they are sufficiently clear and informative and a failure to comply with these standards may result in access to the database being withdrawn by Ofgem.

The report mentions that they have discussed the plans with the Information Commissioner's Office, and it seems they told them that all is dandy as long as they give victims the chance to opt out. Bullet 109 suggests that non-switchers will be added to the database no matter what but that they'll will be given information about opting out of having their personal details passed to energy junk mailers. If so, it's bizarre the Information Commissioner's Office has agreed to such use of personal data. Ofgem will be compiling the database using personal data that has been provided to energy companies in order to receive energy; it seems obvious that the personal data is now going to be used for quite different purposes. But then it also was the Information Commissioner's Office that screwed up the stupid cookie law.

Something ought to be done!

If the plan for a free junk mail database goes ahead we should have an opt-out website that lets you send data protection notices to all energy companies in the UK (that is, legally binding demands that prevent companies from using your personal details for marketing purposes). I'm thinking of something along the lines of my old Junk Buster website; a simple form that asks for your name and address and which then fires off e-mails to junk mailers. Because, believe it or not, some people don't want to switch to another energy supplier.

Last updated: 
10th March 2016

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