09/02/2022
Truth about energy companies.
From 1st of October 2021 many energy companies announced about price rise.
Then media picked that up and keep bringing up “wood in to the fire”.
I got a rule of thumb - question everything that comes from mass media and ask golden question:- “where is the money here?”. Follow the money & it will show you the answer.
Truth №1
If you think that energy company is only about providing people with gas & electricity - think again. They are financial companies that make money on us, consumers.
Energy companies get direct debit payments and often those payments are bigger than actual bills.
How it works? Lets say energy company “E-con”(made up name) provides gas & electricity. You decide to set up direct debit with them. They look at ALL your details and give you an ESTIMATED figure. It means OVER exaggerated figure. Example: they say to you that your DD payment is £200 per month for gas & electricity. You sign up for fixed rate and think that its all great & done. Time to time you might give them some readings or worse they get it from your smart meter. Then they can even increase DD payment, even if you have a fixed term with them for number of years.
Now do some calculations £200 x 12 month = £2400 from ONE household when actual usage of this household could be only £100 per month. E-con keeps over £1000 in their accounts & … invest it. They invest YOUR money without giving you anything back for it.
Now think how many customers they have. You can use a calculator to figure out the rest.
E-con say that we will adjust everything later etc. Its not so easy to get that money from your account with them (any energy company). Takes time and energy. Also, nowadays, many energy companies can go burst, that is why it is not safe to keep there your money. Its not safe to over pay them for your bills. Energy companies in the UK are not regulated by FCA (Financial Conduct Authority) or PRA (The Prudential Regulation Authority).
Just to see for yourself that they make money on your money - as an example - check out OVO energy. They offer 3% interest for the balance of your account with them. Official interest rate of Bank of England is lower than 1% (for this moment Feb 2022). If energy company can give you 3% interest on your account balance - how much do they make themselves?
I’m not against investments. In fact, I encourage my customers to search for a good investment options - ecological investments. Meaning that they should bring good to people, to the world (can’t invest to guns or alcohol). And the money for investment should be taken not from credit cards, not from borrowings or from pressure. Money to investments should go from your concise will. If someone using taking money from you with a pressure and then invest it - it is not ecological. It goes against people’s wills.
That’s what energy companies do at the moment. They put fear into peoples heads & hearts. They make people suffer, turn off heating when it’s not necessary.
Truth №2
The price for energy in the UK by February 2022 didn’t go up us much as media & energy companies say. Not twice. The amount taken by DD (Direct debit) is ONLY ESTIMATED!
This all been done to justify high direct debits. Thats all.
Energy companies put people under emotional pressure to justify high direct debit amounts taken from customers. This on itself against many laws.
How to deal with that? The information won’t fit into one post, so I decided to make a little guide for it, that I’ve prepared recently. It’s all free. Just want more people to know about it.
Will attach the link to it very shortly. Keep an eye on the ball ;-)
