Which? has written to Ofgem alongside E.ON, Octopus, So Energy, Rebel Energy, the End Fuel Poverty Coalition, Citizens Advice and Fair by Design, calling on the regulator to reconsider its proposal to lift the ban on acquisition-only tariffs1. The letter was published on 29 June 2024, ahead of a final decision that Which? says is due imminently1.
Ofgem has said it is minded to remove the ban on acquisition-only tariffs, which suppliers use to attract new customers or lure switchers from rival firms, from 1 October 20241. It has consulted on the change and has not yet reached a final decision1. Under acquisition-only pricing, existing customers would not have access to those deals, and Which? says consumers who want to stay with their current supplier could be left worse off, with new customers facing higher bills once an initial deal expires1.
In the letter, the organisations warn of the risk of "a return to a market which discriminates against loyal customers"1. They also raise the potential impact on customers in debt, who may not be able to switch but could find it harder to access a better deal with their current supplier under the plans1. The letter points to recent history, when more than 30 suppliers went bust, many after trying to win customers with unsustainably cheap tariffs1.
Which? also published survey findings on public attitudes. Yonder, on behalf of Which?, surveyed a nationally representative sample of 2,090 UK adults between 3 and 4 June 2024; of those, 1,912 were jointly or solely responsible for their household's energy bills1.
| Finding | Share of respondents |
|---|---|
| Would think it unfair if their supplier offered cheaper deals to new customers only | 81% |
| Would think this unfair even if they could benefit in the short term by signing up | 78% |
Rocio Concha, Which? Director of Policy and Advocacy, said:
"Allowing deals exclusively for new energy customers could open the door to loyalty penalties and would come at the expense of those who wish to stick with their current supplier on their best deal."
Why it matters for households
Acquisition-only tariffs separate the price a household pays from the price a supplier advertises. A home that stays with its supplier, or that cannot switch, would sit outside the cheapest deal on offer, while a new customer signing up to the same supplier would pay less for the same energy. For a household weighing up a fixed-rate energy tariff against a variable one, the ban's removal would add a further question: whether the rate on offer is available to them at all, or only to someone arriving from another supplier.
The coalition's concern about customers in debt is a point about who can act on a cheaper deal. Switching requires passing a credit check and clearing any outstanding balance with the current supplier, so a household that cannot switch would be exposed to its existing supplier's standard rates with no route to the advertised price. That is the mechanism the letter describes as a loyalty penalty1.
The wider effect is on the terms households can expect when they stay put. The tariff rules Ofgem requires suppliers to offer set the baseline of what a domestic customer is entitled to; whether a supplier may reserve its best rate for new customers is a separate question, decided by the regulator rather than by the tariff terms themselves. Which? frames the decision as one about trust in a market it describes as having a history of unfair pricing, low levels of trust and major difficulties with customer service1.
What happens next
Ofgem has consulted on removing the ban and is due to reach a final decision imminently, according to Which?1. The proposed date for the ban to be lifted is 1 October 20241. No final decision had been reported at the time the letter was published1.