Helping consumers in tough times true test of firm’s worth - Rocio Concha of Which?

In a Which? survey of almost 9,000 energy customers about their experience with their provider and any complaints they had, four in 10 raised issues about bills or statements. Of those, a third (32%) said that their supplier took a one-off payment without warning; a fifth (21%) said they received an inaccurate bill; and an eighth (13%) said direct debit payments increased without warning.

What sets the best companies apart from the rest is how they treat their customers when times are tough. When consumers are facing serious financial pressure, it ought to be incumbent on firms to step up and make life easier for their customers. The energy crisis has made finding fixed tariff deals that are cheaper than the level of the default tariff price cap difficult, meaning it hasn’t made financial sense for many consumers to change suppliers. Arguably, the lack of viable switching opportunities has led to complacency among some providers. Why strive to make customers’ experiences better if you know they’re unlikely to take their business elsewhere anytime soon?

It isn’t just energy providers. There are other examples of firms using unfair practices. This Saturday, broadband and mobile bills will all increase at a time when consumers continue to battle an unrelenting cost of living crisis.

Some broadband companies, like Zen Internet and Hyperoptic, have pledged not to raise prices during customer contracts, but most will hike them. It’s a similar story for mobile contracts, with customers trapped in the unenviable Catch-22 of either accepting exorbitant mid-contract price increases or paying exit fees of over £400 to end their contract. Firms raise prices in April using either the Consumer Price Index or the Retail Price Index, plus an additional 3.9 per cent, meaning some customers will face eye-watering hikes of more than 17 per cent this year.

This level of price increases are unfair - and it’s very hard to make the case that they merely reflect rising costs businesses themselves are facing. Companies should urgently reconsider mid-contract price hikes and cancel them altogether for financially vulnerable consumers. All customers should be free to leave their contracts, penalty free, if they’re hit with price increases during their contract.

The grocery shop was seldom a weekly highlight for any of us before the cost of living pressures hit, but food costs are now also the main driver of soaring inflation. The numerical gymnastics required to work out what is and isn’t a good deal makes a trip to the shop feel like an episode of Countdown. As I have argued previously in these pages, supermarkets must do more to help customers by making pricing more transparent; ensuring budget ranges for affordable essential items are available where they’re required most; and tailoring support - in the form of offers, vouchers and loyalty cards - to those most in need.

In a crisis, clear communication is essential. Firms need to be much more forthcoming in explaining the pressures they’re under to help their customers understand why prices are being put up. But sometimes communication isn’t enough - and deeds matter far more than words. This is especially true when consumer confidence in some of these sectors has dropped significantly, according to Which?’s consumer insight data.

Consumers judge companies by their benevolence, meaning short-lived actions, like temporary price promotions, end up looking more like PR stunts than a genuine commitment to helping customers through a difficult time.

Firms who make life harder for customers don’t just risk regulatory recriminations, but also reputational damage. Consumers won’t forget who did and didn’t step up to the plate.