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Over-complicated household bills are leaving consumers vulnerable to over-charging

Consumers are being left confused and potentially out of pocket by jargon-heavy and over-complicated household bills, according to new research from Uswitch.com. Almost three quarters of consumers (73%) are unable to work out whether there has been a mistake on their energy bill, while almost a third (30%) say the same for their water bills. The findings are a serious concern as in the last year consumers were overcharged by £6.7 billion on household bills, with 95% of cases spotted by consumers themselves:

  • Worst offenders: energy companies sweep the board for baffling bills – 86% find them too complicated, 73% say they use too much jargon and 65% can’t find the information they need

  • More than eight in ten people (82%) find energy bills harder to understand than any other – almost four in ten (38%) think they have lost money because an energy bill has been too difficult to understand

  • DTV providers, banks, credit card and mortgage companies send the least complicated bills, but consumers trust council tax departments the most to get bills right.

Consumers struggling with the rising cost of living could be losing out further because they are being left bamboozled by their household bills, according to new research from Uswitch.com, the independent price comparison and switching service. Companies are guilty of sending bills and statements that are over-complicated, confusing and full of jargon, leaving many consumers unable to tell whether there has been a mistake or not.

Almost three quarters of people (73%) are unable to work out whether there has been a mistake on their energy bill, while almost a third (30%) say the same for their water bill and over a quarter (28%) for their home telephone. This leaves consumers vulnerable to issues such as overcharging, which can leave a serious dent in household budgets. In the last year alone, consumers were overcharged by £6.7 billion on household bills with 95% of cases spotted by consumers themselves rather than the companies concerned.

Energy suppliers are the worst offenders for baffling bills – in fact, more than eight in ten people (82%) find energy bills harder to understand than any other household bill. 86% say energy bills are too complicated, 73% say they use too much jargon and 65% cannot find the information they need. This puts energy suppliers at the opposite end of the spectrum to other bill providers, such as DTV companies, banks and building societies, mortgage and credit card companies.

Worryingly, almost one in four consumers (38%) think they have lost money because an energy bill has been too difficult to understand. In fact, such is the complexity that just a quarter (27%) are certain that they haven’t lost out.

Despite this, consumers still trust energy companies more than some other sectors to get bills right. Almost four in ten (38%) trust their gas or electricity supplier, while just 21% trust their DTV provider and 33% their mobile phone company to get their bills right. However, consumers trust council tax departments the most (52%) when it comes to correct billing.

Importantly the findings contain some good news for consumers, highlighting the fact that many companies and industries are taking steps to improve the bills they send to their customers. And energy suppliers are leading the way – almost half of consumers (45%) say that their energy bills have become more customer-friendly in the last year. Three in ten say the same for home telephone bills (30%), while consumers have also seen improvements from broadband providers (28%) and banks and building societies (27%).

Ann Robinson, Director of Consumer Policy at Uswitch.com, says: “Consumers are spending thousands of pounds a year on household bills – they need to be sure that what they are paying is correct and it shouldn’t take rocket science to do so. In this day and age, clear and concise bills should be the very least that consumers should expect. The fact that some companies and industries are still unable to get this fundamental part of their service right is simply unacceptable.

“It’s also clear that some sectors such as banking and personal finance are leading the way in providing customers with bills that they can understand, check and act upon. It’s important that other sectors look at their success and start to learn from it. All industries use jargon, but some are clearly better than others at shielding their customers from it rather than blinding them with it.

“While the energy industry has come out of this poorly, we know that individual suppliers have been making huge efforts to improve the quality of their bills. This is to be applauded and the fact that 45% of people recognise that their energy bills have become more customer-friendly in the last year is extremely encouraging.

“Supplying simple, straightforward and helpful bills is a vital part of building trust and consumer confidence. It helps to put customers in control and enables them to make informed decisions and choices about products and services. It also means that consumers stand a greater chance of spotting any inaccuracies or incorrect charges – this is also why, despite the difficulties, consumers must continue to check their bills carefully as failure to do so could leave them out of pocket.”

How household bills compare:

| |

Energy

|

Home telephone

|

Broadband

|

Water

|

DTV

|

Bank/ building society

|

Mobile phone

|

Council tax

|

Credit/ store card

|

Mortgage

|

Too complicated

|

86%

|

21%

|

14%

|

22%

|

5%

|

8%

|

16%

|

14%

|

8%

|

6%

| |

Too much jargon

|

73%

|

21%

|

29%

|

21%

|

8%

|

20%

|

25%

|

18%

|

17%

|

15%

| |

Can’t find the information I need

|

65%

|

23%

|

24%

|

20%

|

7%

|

11%

|

23%

|

15%

|

10%

|

10%

| |

Unable to work out whether there has been a mistake

|

73%

|

28%

|

22%

|

30%

|

8%

|

14%

|

27%

|

20%

|

12%

|

10%

| |

Trust supplier to get bills right

|

38%

|

42%

|

41%

|

47%

|

21%

|

44%

|

33%

|

52%

|

32%

|

36%

| |

Bills more customer-friendly in last year

|

45%

|

30%

|

28%

|

24%

|

9%

|

27%

|

20%

|

23%

|

17%

|

12%

|

FOR MORE INFORMATION

Jo Ganly

Phone: 020 7148 4662

Email: jo.ganly@uswitch.com

Twitter: @UswitchPR

Notes to editors

All research referred to in the notes below was conducted with the Uswitch.com Consumer Opinion Panel amongst 1,020 respondents in May 2013.

  1. In response to: ‘Thinking of your different household bills, please tick if you agree with any of the following sentiments’ – see table above for key findings.

  2. In response to: ’Thinking about your household bills (gas/electric, home telephone, broadband, water, DTV, bank/building society, mobile phone, council tax, credit/store card, mortgage etc) have you been overcharged in the last year? 37.1% said ‘yes – once’, 17.2% said ‘Yes – twice’, 5.7% said ‘Yes – three times’ and 10.0% said ‘Yes – more than three times’. These add up to 70% who have been overcharged at least once in the last year.  The average was £196. £6.7 billion calculated as 70% of 49 million consumers (34,300,000) in the UK multiplied by the average amount overcharged in the last year.

  3. In response to ‘Who spotted any overcharging, you or the supplier? (If more than once, think of the last time it happened’) 95.2% said ‘You’ and 4.8% said ‘the supplier’.

  4. In response to: ‘Compared to your other bills (for example, credit card, mobile phone, broadband) do you think your gas and/or electricity bills are a lot harder to understand / a little harder to understand / the same / a little easier to understand / a lot easier to understand’, 50.1% answered ‘a lot harder to understand’ and 31.8% answered ‘a little harder to understand’ adding up to 81.9%.

  5. In response to: “Do you think you’ve lost money because an energy bill has been too difficult to understand”, 37.9% said ‘yes’, 35.1% said ‘don’t know’ and 27% said ‘no’.

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