Vulnerable consumers ‘left behind’

Removing price controls in energy, telecoms and postal markets has proved beneficial but some “vulnerable” consumers are being left behind, a report warns.

The National Audit Office (NAO) reports that the introduction of competition by regulators Ofgem, Ofcom and Postcomm between 2002 and 2006 has allowed consumers to find a better deal by switching providers.

But it says complex tariff systems and a lack of information are preventing some consumers from taking advantage of this.

And it also notes that suppliers which formerly held monopolies still have a “strong position” in their respective markets.

Tim Burr, head of the NAO, said: “The removal of price controls is an important step in the development of competition in these markets, but it is not the end of the story.

“Ofcom, Ofgem and Postcomm need to be vigilant, and be prepared to use their other powers when necessary, to ensure genuine competition is present and that it is working to serve consumers.”

The NAO went on to call on the regulators to continue to use their competition and consumer protection powers to ensure that markets continue to protect the consumer and that consumers can take further advantage of competition.

But charity Help the Aged warned many older people were at risk of being “taken for a ride”.

Its head of policy David Sinclair pointed out those over 50 are responsible for nearly half of all consumer spending and were therefore at risk of failing to “meet the expectations and needs of older customers”.

Liberal Democrat environment spokesperson Steve Webb criticised Ofgem, the energy watchdog, for not doing enough to help consumers “combat soaring energy prices”.

“It should find out why vulnerable customers are reluctant to change suppliers, when they have most to gain from competitive prices. The energy companies have a duty to make their prices and tariffs much easier to understand,” he said.