Customer bills: cutting through the jargon

SSE made headlines last week with a redesigned energy bill that uses plain English in a bid to make complex information clearer for customers.

Complicated, opaque bills are a perennial problem. The industry has come under fire from the regulator Ofgem and consumer group Which?, calling for the obligatory information included on bills to be broken down and technical jargon to be made understandable. Over the past few years many suppliers have faced fines from Ofgem for billing system issues, with Npower receiving the highest fine of £26 million. 

Engagement with the energy market is one of the topics on the table for the ongoing Competition and Markets Authority (CMA) probe. Whilst the industry awaits the final remedies to be announced in June, speculation suggests that solutions for better billing will be one important element.  By responding to the calls for clearer bills companies can help to reduce complaints and increase customer satisfaction in an industry suffering from broken trust.

Why it is important?

Bill clarity can prevent the need for back-billing, and save energy companies time otherwise spent resolving issues and queries. Information that sets out details of the customer’s tariff and provides insight on usage could also increase engagement in the market and give customers the ability to make informed decisions about switching and energy efficiency.  

Money Supermarket energy expert Stephen Murray said that engagement in the market is the most important reason for a bill redesign from suppliers: “On a customer statement there should be a summary box with the key things that a customer needs if they want to use their bill as a primary tool to engage them in switching.”

A summary box would label the information such as tariff name, how much gas and electricity customers have used and their payment method. Suppliers should also consider introducing a seasonality model across the industry to try to help and support customers in understanding how much they have used in the last year or how much they are likely to use based on their current consumption pattern.

What problems do unclear bills cause?

Energy bills are the main form of communication between a customers and supplier but are also the number one reason for complaints – often as a result of customers misunderstanding the bill or struggling to find the information needed. An increase in the amount of information suppliers are required to include has further complicated bills’ layout. The energy industry as a whole has a poor reputation for customer service and this is worsened through high complaints numbers and fines imposed on those who cannot resolve complaints efficiently.

SSE group managing director Will Morris said: “Customers told us that they want to be able to find the information they need quickly and easily; they don’t want the bills to be longer than two pages and they don’t want unnecessary or confusing information (calorific conversions being a good example).”

What can companies can do about it?

SSE seems to have got it right. The redesign which involved 8,000 customers, the Design Council and Citizens Advice, among others, has moved block information into bubbles that clearly divide the electricity, gas and total amounts. The bill also incorporates a box which explains to customers how they can save money and the name of the tariff they are on. SSE also includes usage graphs for the customer that represent usage comparisons against their previous bills.

The Campaign for Plain English encourages other energy companies to take note and says suppliers should use SSE’s design, which they call a “fine example of clear commercial communication”, as a template.

Which? executive director Richard Lloyd also said the consumer group wants to see all providers come forward with solutions to be trialled and tested with Ofgem.

Energy UK chief executive Lawrence Slade believes that “ultimately wholesale and operating costs should be broken down on the bill” to get the message over about the “make-up of the bill is and what the different parts are.”

“For too long we haven’t had these conversations and it is time for government policy and how these things are charged out to be absolutely transparent,” Slade says. 

As the CMA prepare to intervene on bills, other suppliers will be taking note.