Southern Electric - We Have Frozen Our Prices

The big freeze turns into a 4.5% thaw
Southern Electric - Did they mislead customers into a choosing a price fix?

I've been a Southern Electric customer for quite a few years. They score very highly in customer service polls and when I phone them they answer my calls quickly and deal with my account without problems.

I was offered a price plan called Go Direct 5 which saved me about 19% on gas last year, but like all good things it came to an end in December. So they wrote to me and suggested I could call them about fixing my energy prices for 2 years until December 2013.



The letter they sent me also said 'we're the only energy supplier to have frozen our prices until at least August 2012' (now extended until October).

So bearing in mind Southern Electric had 'Frozen' their prices until August - and prices tend to drop in spring and increase in Autumn, I chose to 'fix' at the December 2011 price for 2 years until December 2013.

So I wasn't too thrilled when in early January 2012 Southern Electric announced that they would decrease their Gas price by 4.5% from the end of March. Funny kind of price 'freeze' guys.

Even worse on 26th January a letter dated 5th December arrived saying 'You've made a great choice fixing your prices with Southern Electric'.

No - not such a great choice actually - you've dropped your price by 4.5%, and I'm stuck on the old price.

So on Saturday I phoned Southern Electric to complain they promised prices were 'Frozen' so I fixed, but now they have dropped the price. Their letter misled me into making a choice I may not have made if they'd given me all the facts.

Now remember I wrote at the outset that I stay a Southern Electric customer because of their customer service? Well they didn't disappoint. The manager I spoke to agreed I could end my fix without exit penalty if I wished, and that she would investigate the letters I received.

Today she called me back, exactly as she promised. She's reviewed all the letters and listened to the phone calls I had with them in December and spoken with the Customer Services Manager whose name appears on the letters. I can be assured Southern Electric value my feedback about their marketing.

She also confirmed I can end my fix without penalty, it is entirely my choice.


I point out that their website still promises 'Our Prices Won't Budge' and perhaps the marketing department should choose their words more carefully - 'Won't Budge' doesn't leave much room for ambiguity - especially if prices may come down as well as go up.

The word 'Frozen' didn't suggest prices may also come down.

I'm very happy with the way Southern Electric has investigated my complaint. But I agree with the regulator Ofgen that energy suppliers overly complicate the market by offering so many different tariffs which are difficult to choose between. Many consumers end up doing nothing and remain on uncompetitive plans with the same supplier they've had for years. That limits competition in the market and keeps prices artificially high.

In reply the energy companies have agreed to simplify tariffs, and make consumer choice clearer. Southern Electric has said that in future it will have just 4 tariffs. British Gas has pledged simpler tariffs 'to win back trust'.

Southern Electric are selling their tariffs using words we all understand - 'frozen' 'won't budge' - now all they need to do is stick to them.

I've decided (despite my complaint) to stick with my price fix. Prices rose 19% last year, so far they've only dropped 4.5%. Averaged over the last 2 years energy prices have only gone in one direction - up.

Beware! Churchcastle and The Sun - Wordsearch Competition ends in huge phone bill

Churchcastle run adverts like this in The Sun newspaper. If you enter they'll start writing to you inviting you to enter some competitions which could cost you very dearly.

Recently a 90 year old relative got into a spot of bother. She racked up a phone bill for £120 phoning a premium rate word search competition line. She became very frustrated when she didn't win - even though the letters she received promised she was just a step away from a big cash prize. What she didn't realise was that each phone call she made was costing her almost £10. Money she could ill afford to lose. I've been helping put things right.
She likes entering word search competitions. She's also an avid reader of The Sun. On 26th October The Sun carried a full page advertisement feature on P26. It promised readers that for an 18p phone call (from a BT landline) lasting less than 1 minute they could win £7,000 if they could identify the words hiding in the published grid of letters.

The small print carries all the Terms and Conditions and call charge information. PhonePayPlus (the premium rate telephony regulator) rules say these charges should be shown prominently with the telephone number. Apparently this ad doesn't break their rules. Can you believe it!

18p isn't much, even to a pensioner, and it's much less than the price of a stamp, or a lottery ticket. She phoned the number and correctly identified the words and left her address so they could send her the prize if she won. Soon afterwards she received a series of letters congratulating her on her word search skills. 'Only 2% of the newspaper's readers had identified the words' (note the clever choice of words - not readers who entered, but all the readers).

The highly personalised letters urged her to make another phone call - as an even bigger cash prize was now within her grasp.

Another Churchcastle promotion which ran in the Sun 24th September 2011. Word search fans could enter a competition to win an 'Emerald' Pendant complete with 'Gold tone' chain. Read the very small print and you'll discover how much the prize will really cost you.

The 'Emerald Pendant' Sun readers received - complete with 'Gold tone chain' and its certificate of authenticity signed by an un-named 'gemologist'. Impressive...er no. The telephone call to 'win' this cost Sun readers who ressponded to Churchcstle's advert £9.18 - after a call lasting 5 minutes 55 seconds at £1.53 a minute and an extra £4.59 if they stayed on the line to receive matching earrings - 2 minutes 55 seconds also at £1.53 per minute.

These letters praising her word search skill may also have started because of another advert in The Sun she responded to in September. This full page ad also contained a word puzzle - but there was a prize for every reader who got the correct answer - an emerald pendant on 'gold tone' chain. A cheaper prize you have never seen. In fact one may also be lurking inside cheap Christmas Crackers.



But whichever 'bait' lured her in, both advertisements were run by the same company. Churchcastle are based in St Leonards on Sea, Sussex. I searched for some information about them online. I discovered Churchcastle were taken to the High Court by the Office of Fair Trading in 2006 (click to read) for running similar competitions. In the sample case presented to the court over 446000 mailings had encouraged 56,000 recipients to phone a number costing £1.50 a minute - £7.50 in total - believing they had won a major prize including £10,000 in cash, a fitted kitchen, or a widescreen TV. In fact they received a low value voucher booklet. The court instructed Neil Frogley the promoter behind Churchcastle to clean up its act, or they would be back in court.

An example of one of the letters Churchcastle send to Sun readers who respond to the competitions advertised in the newspaper. This letter appears to suggest that the recipient is eligible for a £7000 prize - all they have to do is phone (I can confirm the call costs £9.60 - thanks to using a magnifying glass on the small print). The letter says 'Cash prize delivered by secure DHL Express Couriers immediately after winner announced' and advises 'we would also like to ask that you condsider our using your initials and home town for future publicity purposes'. Nice work. Snake oil salesmen would be envious of copy this enticing.

Since 2006 it appears Churchcastle have continued to promote competitions which manage to stay within the letter of the various rules on advertising and premium rate telephony but at the same time extract large amounts of cash from gullible entrants.

I telephoned Consumer Direct and a very helpful woman from Trading Standards (at the Council where my relative lives) called me. She knew all about Churchcastle. Then I phoned PhonePayPlus who regulate the use of Premium Rate telephone lines. They also knew about Churchcastle. In fact they have had a string of complaints about the company and its very expensive competition lines. But apparently none of the letters or adverts break their rules.

Then I phoned The Sun, where I was put through to parent company News International readers advertising department. A very helpful woman assured me Churchcastle was a reputable company, and they were always sending in letters proving how many prizes they had awarded. However she understood that my elderly relative had not meant to spend so much money entering their competitions and immediately agreed that she would ask Churchcastle to refund the money.

Shortly afterwards a cheque for £120 arrived made payable to my relative and cleared without problem. She continued to receive the letters telling her she was within a call of winning a big cash prize, and then they stopped. She still took some convincing that she wouldn't win if she dialled the number.

My elderly relative was embarrassed about the money she lost.
I wonder how many other people have unwittingly run up a huge phone bill thanks to Churchcastle?

I also complained to BT about the original 18p call advertised in the Sun - which was charged at 21p on the phone bill. BT said it was the phone service provider's mistake. PhonePayPlus told me the call should have cost 18p. I couldn't get to the bottom of it, but BT promised to refund £10 as a goodwill gesture for all the trouble. Why is everyone offering money not to take this complaint more seriously? Is it such a profitable enterprise for The Sun, BT and Churchcastle?

Finally I considered complaining to the Advertising Standards Authority about the ad in The Sun, and the 18p call which cost 21p and resulted in such expensive letters. But as all the ASA do is instruct companies not to run offending advertisements again I decided I might as well shout out of the window as write the email.

Has this happened to you, or someone you know?
The Office of Fair Trading and the High Court are the only way to stop what looks like, and feels like a 'scam'.

Remember if something looks like a scam, and feels like a scam it probably is a scam.



IIth October 2012 - I have published a dramatic update to this story here. Churchcastle has been fined £800,000 and told to refund people who entered these word search contests.