Simples! Ofgem ban on "complex" tariffs kicks in

The New Year ushers in a ban on “complex” electricity tariffs by energy regulator Ofgem. Suppliers won’t be able to offer tariffs such as those where consumers are first charged […]

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By Vicky Ellis

The New Year ushers in a ban on “complex” electricity tariffs by energy regulator Ofgem.

Suppliers won’t be able to offer tariffs such as those where consumers are first charged a higher rate, which falls the more they use.

Ofgem said the reforms also mean that once a consumer has decided how they want to pay for energy they will have just four tariffs to choose from for gas and four for electricity, from each supplier.

From April 2014, other changes kick in to make suppliers give customers much clearer information on energy, such as regularly writing to customers about which of their tariffs is cheapest for them.

Andrew Wright, Ofgem’s Interim Chief Executive said the reform should mean competition “bears down hard” on prices.

He said: “Profits are not an entitlement, they should be earned by companies competing keenly to offer consumers the lowest prices and the best service.”

Experts at price comparison site uSwitch.com warned there is danger reforms could “misfire” and result in higher prices for consumers.