The Charity Commission and Ofgem have today published their responses to the Age UK / E.on partnership, which The Sun and TheBigDeal.com exposed in February 2016.
Age UK, Britain's largest old people's charity, had been recommending a poorly-priced energy tariff to elderly consumers. In return, Eon-the Big Six energy supplier behind the tariff-paid the charity around £6 million a year. The deal cost the average consumer £1,049 per year, which was £245 more than Eon's cheapest rate.
The Charity Commission said that it was "not clear that Age UK complied with its processes", that there was "potential for significant conflict" and "insufficient" oversight mechanisms.
In stark contrast, Ofgem concluded there was "no case to open an investigation".
Responding, co-founder of TheBigDeal.com Will Hodson, said:
"The Charity Commission has confirmed what any right-thinking person already knew - the stitch-up between Age UK and Eon was a national disgrace. It's a shame that the only people who disagree run Britain's energy regulator. Where the Charity Commission condemns casual exploitation, Ofgem simply sees 'business as usual'."
For more information contact Will Hodson on 07580 024303 or Edward Molyneux on 07970 061562
The Charity Commission press release and full report is available here: https://www.gov.uk/government/news/commission-publishes-report-on-age-uk
Key quotes from the report:
- "It was not clear that Age UK having complied with its processes, sufficiently considered the risks of targeting beneficiaries with a commercial product in an area where the charity also campaigns on behalf of its beneficiaries. It is therefore the commission's view that, given the potential for significant conflict between the impact of commercial arrangements on the charity's purposes with its beneficiaries and income generation by the trading company."
- "The trustees of the charity do not dispute that it was rarely the cheapest tariff offered by E.ON over a four year period."
- "The commission is of the view that it is likely (given that the charity's brand endorsement of the tariff would have been understood in the context of the charity's purposes and its work in respect of fuel poverty) that this could have set an expectation amongst some that the tariff would be the cheapest available rather than the broader definition of 'best value'."
- "The commission did see evidence of review of the ongoing suitability of the E.ON deal. However the length of time between reviews were in our view insufficient given the level of inherent risk in such a commercial arrangement. The commercial and contractual arrangements in place, such as clause 7.6 of the main contract, which states "to the extent reasonably possible the parties must not do anything to prejudice or otherwise affect the goodwill business or reputation of the other party" also provided some ability for Age UK to act should the risks or 'best value' provided by product or deal deteriorate. Notwithstanding this we consider that the processes and considerations in monitoring and taking action in this area to have been insufficient."
Notes to editors
TheBigDeal.com is a consumer collective focused on reducing people's energy bills. We bring together tens of thousands of consumers and use our collective buying power to create exclusive deals.
Launched in March 2014, we now have over 200,000 members and continue to grow. 62% of our members have never or hardly ever switched before - these are the very people who have been let down by the energy market for too long. Moreover, 60% of our members are over the age of 55 and 30% over the age of 65. We have saved the British public over £10 million since we launched.
TheBigDeal.com is a start up business and charges a commission to energy companies. Unlike too many in the energy industry like price comparison websites we are 100% transparent and publish the exact amount of our commission. For our latest switch that was £40 for a dual fuel (both gas and electricity) switch. This compares to £50 to £100 for the main price comparison websites.
TheBigDeal.com research exposes price comparison sites' dodgy behaviour online and over the phone
On 20th October 2014, TheBigDeal.com published research that showed that the Big Five switching websites (Go Compare, Compare the Market, MoneySupermarket, uSwitch and Confused) all hide the cheapest deals from users because they don't get paid by energy companies for them. The full research including over 200 screenshots taken over 13 weeks can be found at: https://thebigdeal.com/blog/research-into-price-comparison-websites
On 2nd February 2015, TheBigDeal.com published similar research except into activity over the phone that found that all the Big Five switching websites (Go Compare, Compare the Market, MoneySupermarket, uSwitch and Confused) hid the cheapest deal when talking to customers.
This research led to an official investigation into the behaviour of the Big Five price comparison websites by the Energy and Climate Change Select Committee. http://www.parliament.uk/business/committees/committees-a-z/commons-select/energy-and-climate-change-committee/inquiries/parliament-2010/energy-price-comparison-websites/
The energy regulator Ofgem also tightened up the rules around comparison sites following our investigation: http://www.bbc.co.uk/news/business-30912626