One of the most controversial plans outlined by the Competition and Markets Authority (CMA) will see energy providers share customer data to allow rivals to offer them better deals.
It is aimed at the millions of so-called “sticky” customers who are on more expensive default standard variable tariffs (SVTs).
The CMA said the database will be controlled by energy watchdog Ofgem and would be subject to “strict safeguards” on communication from rival providers and would allow customers to opt out at any time.
Under the proposals, if a customer has been on a SVT for three years or more they will receive a letter from Ofgem informing them that they will be put on this open database, unless they opt out.
The other 36 suppliers in the market can then contact them directly to offer better deals, potentially leading to a raft of marketing letters.
But the CMA stressed that they can only contact customers by post and will not have access to telephone numbers.
There are still concerns over data security and worries that the move will see customers bombarded with information.
Lawrence Slade, chief executive of Energy UK, which represents major British energy firms, said: “We agree that customers should have the information they need to make an informed choice but
would like people to be able to choose if they get marketing information or not.
“The implementation of this proposal will need to be carefully considered to ensure that customers’ personal data and right to privacy remains protected.”
Stephen Murray, energy expert at price comparison site Moneysupermarket.com, welcomed the plan “if it helps vulnerable or disengaged customers who stand to save the most money”.
“However, the devil’s in the detail and we need to understand how this will work in practice. It’s important that customers don’t feel hounded, or as if their trust has been compromised,” he added.
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