It’s time businesses use their plethora of data to assist so many struggling costumers
Whatever drama is unfolding in Westminster, tackling the cost of living remains consumers’ number one priority. There is still so much work to be done to help millions of people facing dire financial situations.
The government has already announced new measures to support consumers, such as help with soaring energy bills. But it could go further in other areas, including by cutting VAT on essential telecoms services to 5 percent, and extending free school meal eligibility.
Yet the current crisis won’t be solved by government intervention alone. Businesses have an important part to play. Firms face a triple threat of new trading arrangements, a global pandemic and a cost-of-living crisis, but unprecedented times call for unprecedented measures.
Businesses may not always be able to cut prices, but they can review their pricing practices to ensure they are fair in the current circumstances. Improving transparency would tackle confusion over some pricing and billing practices that make it hard for consumers to find a good deal and pile on even more stress.
Rising costs have made many consumers more savvy, yet supermarket shopping still often requires mental gymnastics to work out which deals are really deals and which product is genuinely the cheapest. Recent Which? research found reduced availability of discounts and budgets ranges in supermarkets over a two-year period. This trend has to be reversed.
And it isn’t just the food shop. Consumers are still struggling to understand energy bills and pricing, as emerged in Which?’s latest Consumer Insight panel. At a time when customers are paying more than ever for energy, companies should communicate clearly and explain how bills are calculated. We are hearing far too many stories of consumers confused about whether their bills are accurate.
Energy companies have met with debt charities and consumer groups and made promising pledges to be more transparent about tariffs and how they set direct debits. They’ve also explored what else they can do to support struggling customers. Ofgem, on its part, should explore reforming the standing charge while ensuring protections are in place for vulnerable customers with high usage. More work is also needed on some eye-watering contract exit fees in energy and telecoms, which merit investigation by regulators. Instead of waiting for an investigation into their practices, these businesses charging exit fees should act now to ensure they’re fair to customers.
When it comes to shopping around, firms should be doing more to help customers find the cheapest tariff. Telecoms and energy providers can help customers to access any support that may be available to keep them connected, such as allowing them to move to cheaper packages without charge or penalty, or agreeing manageable payment plans.
The government now has opened data to the energy sector, so this coming winter those who are eligible should automatically receive a Warm Home Discount. This will remove a burden on both the consumer and the business to prove and verify circumstances – depending on whether the energy company complies with the scheme. Yet we know that too few consumers – less than 2 percent of those eligible – have taken up broadband social tariffs. For instance, the average take up of Healthy Food Vouchers in England 2020 was just 54 percent. Government should support businesses to reach those most in need by opening eligibility data in the same way it has done for energy companies to telecoms companies and supermarkets.
Firms can be acting now with the treasure trove of data they have to identify and reach greater numbers of vulnerable customers most in need. Businesses don’t have a magic wand to wave and solve this crisis any more than government or consumers do. But they have the ability to reach those consumers who really need help.