Age UK investigation into promoting higher energy tariffs

Posted by Erika Bone in Personal Finance on 11 February 2016 - Erika is a Credit Analyst at checkmyfile

The Office of Gas and Electricity Markets (OFGEM) will shortly begin to investigate the assertion by the Sun Newspaper that Age UK have been endorsing unfavourable utilities offers in return for financial remuneration.

Age UK have refuted the allegations that they have been knowingly promoting a higher tariff for E-On Energy to older people, via their price comparison website. The tariff they championed cost pensioners £1049 per year for two years fixed cost, which totalled £245 a year more than the cheapest option if the customer had visited the E-On website directly.

In return for their sponsorship it transpires that Age UK may have received £41 for each successful referral. Over 152,000 older people opted to choose E-On through the Age UK website during the course of 2015, which netted the charity over £6 million. In contrast, this unholy alliance meant that the affected consumer overspent to the tune of £37m.

It is not unusual for comparison websites to receive referral commission but the question of ethics must be raised in this case due to Age UK’s status as a charity. If the allegations are upheld after investigation, Age UK would knowingly have allowed E-On to oversell products to the very people the charity was created to advocate. As recently as January 2016 Age UK have warned that a third of all older people are “anxious” about higher heating costs and have continued to criticise the big six energy companies for overcharging.

What is even more disquieting is that Tom Wright, Age UK’s Chief Executive has been appointed head of the Government’s fuel poverty commission and only last week was announced a non-executive director of the Financial Conduct Authority which regulates companies and protects consumers.

Understandably, since these indictments have come to light a number of MPs have been quick to rebuke E-On’s and Age UK’s practices with Dr Dan Poulter, a member of the Energy Select Committee arguing that both organisations have a “moral obligation to recompense consumers” and along with OFGEM the Charity Commission will be investigating and taking “any action that might be necessary”.

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