On the face of it, it’s an enticing proposition. Simply load up your personal details, and then sit back knowing that you are paying some of the lowest gas and electricity prices around.
And the best bit? You will never have to search out the cheapest energy supplier again, because someone else will do it for you.
That’s the promise from a host of “flipping” energy services. However, Guardian Money has found that customers could find themselves overpaying a firm with a poor customer service record or find the savings are eaten up by fees.
We also found that while savings can be made, they are not as much as if you do it yourself. For the lazy householder, the sites can make sense, but with only a smidgen more effort you’ll save a lot more.
Until last October the flipping services were relatively small affairs but the entry of Weflip, owned by the switching giant GoCompare, has transformed the market.
The Weflip adverts featuring a chameleon have been rarely off TV screens for months now, and will have left many wondering whether it’s worth signing up to the service – or to rivals such as Flipper and Look After My Bills.
So how does flipping work? The sites say that once you have entered your fuel usage patterns, existing tariff, your postcode and your payment details, they will find you the best deal and switch you to that firm. They will then keep checking the market on your behalf and every time there is a price change, and they spot a deal that could make you a saving of £50 a year or more, they will automatically switch you to that supplier.
You get an email notification that it is happening. However, most people will still need to take meter readings, although developments in smart meters may ease the process.
For those who cannot be bothered to keep switching suppliers, these sites should be a boon. Such households are typically overpaying by about £200 a year, or more if they have a large family.
But do you want to hand over control of a major household bill to an outside firm that frankly is there to maximise its profits?
The existing switching sites have long made their money by moving customers to an energy provider that pays them a commission – typically £50-£70 for a dual-fuel customer.
The problem is the very cheapest suppliers do not pay these inducements, so the flipping sites are unlikely to shift you to these best-buy deals.
This week Money tested the major flipping sites. We used a property whose electricity and gas bills are both with British Gas on its standard tariff, totalling £1,132.
Firstly we independently determined the best tariff currently available in the market, using the Energyhelpline.com website. The very cheapest was Outfox the Market at £905, which is a good saving, but we decided against it because of its poor customer service record.
We decided the best all-round value was Northumbria Energy at £922 a year.
So what would the flipping services take us to? First we tried Weflip and after entering our details it said it would switch us to Toto Energy, and that our annual cost would be £961.
But last October it emerged that Toto Energy was bottom in the Citizens Advice league table for customer service. MoneySavingExpert has been highly critical of its “nightmare service”, and Ofgem was forced to intervene last summer. So why was Weflip sending us to them? Weflip said its direct relationships with partners enable it to monitor performance, “as well as regularly reviewing customer feedback”.
Next, we tested Flipper, the company that kicked off the concept. It has a different business model because it charges the customer a £25 fee per switch once a £50 saving has been identified. This should mean that it takes you to companies that offer low prices but don’t pay the switching service a commission.
On test, Flipper took our household to Avro Energy at a cost of £974 a year – which is a good saving, but not quite as cheap as the Northumbria Energy deal we found, which we could have moved to for nothing. Flipper later told us it is adding Northumbria to its supplier list.
Our next stop was Look After My Bills, which has attracted 80,000 customers since it featured on TV series Dragons’ Den. Like Flipper, it required a lengthy sign-up process that included entering our bank details ahead of giving us the tariffs. Inevitably this will deter some people who won’t want to hand out their bank details while they are still researching the market.
Look After My Bills’ systems were down at the vital moment this week, meaning it couldn’t quote or switch. Staff said its popular tariffs prior to the upgrade came from Bulb, Octopus and Tonik. Each of these tariffs would cost just over £1,000 a year in our test, which is a saving of up to £125 a year over British Gas.
If you are regularly monitoring your home energy bills and switching when necessary, these sites are not for you. Could they work for others? Probably, as long as you check the deal to which you are being moved. But does that not rather defeat the object of the exercise?
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