Providers are failing to inform their customers of new cheaper tariffs, allowing them to languish on more expensive tariffs. This earns the energy companies over £2.5bn per year, according to research from moneysupermarket.com.
All six of the big energy companies have updated or launched cheaper tariffs in the past 12 months. With nearly two thirds of customers on a standard tariff, the average household could save £150 a year simply by moving to a better deal with their current supplier.
Paul Schofield, head of utilities at moneysupermarket.com, says: "Energy providers rarely, if ever, tell existing consumers about cheaper options, as the more expensive tariffs allow them to offset the great deals they offer. Allowing existing customers to languish on old tariffs is a money spinner, but it doesn't help build trust or loyalty.
"Banks adhere to a Banking Code, so why can’t energy providers adopt a set of standards to be fair and transparent with their customers when they launch cheaper products."
Part 4 of the Banking Code says: "To help you compare interest rates on all our savings accounts more easily, at least once a year we will send you a summary of these products and their current interest rates."
It adds: "If you have a variable-rate savings account and the interest rate has fallen significantly, we will contact you within a reasonable period of time to tell you about our other savings accounts and offer to help you to switch to one of these accounts if you want to."
Paul Schofield says: "The need for a banking-style code is obvious, with our research finding over 60% of UK customers oblivious to whether or not they are on the cheapest deal with their energy provider.
"There are clear savings to be made by checking if your provider has a cheaper deal, and swapping to it.
"For example, an average customer on Scottish Power's standard dual fuel tariff can save £188 a year if they move to its Online Energy Saver 4 product. If they don't mind changing provider, they could save even more by moving to British Gas or Scottish & Southern's online products, which are the cheapest of all."