Age UK urged to consider involvement in energy market
Age UK has today been urged by the Charity Commission to consider its involvement in the energy market.
The heeding comes after the independent regulator of charities in England and Wales opened an investigation into Age UK following claims made by The Sun newspaper, which alleged that Age UK recommended pricey E.on energy tariffs to pensioners.
The Commission’s report says Age UK never guaranteed to offer the cheapest tariff on the market, and its literature is consistent with this. Instead, Age UK sold the tariff based on its ‘value’ in terms of it being a competitively priced longer term fix with no exit penalties.
However, the report does say that due to Age UK’s separate work on fuel poverty and its endorsement of the tariff, it is “likely that this could have set an expectation amongst some that the tariff would be the cheapest available”.
It further warns that participation in the energy market poses “significant risks” to charities, because of the volatility of prices and competition in the market and the tariff structure, which may be confusing to customers.
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The Commissioned has advised Age UK to:
- Consider whether continued involvement in the energy market is in its best interests.
- More clearly distinguish between advising beneficiaries on ‘money matters’ and engaging in commercial fundraising activity.
- Clearly identify any commission or fee received on all Age UK branded products and ensure this is obvious to consumers.
- Have systems in place to ensure commercial activities don’t undermine the charity’s purposes.
- Make it clear in its Age UK Customer Charter that products and service are not necessarily the cheapest at all times. The charity’s trustees should also consider how potential customers can be made aware of the charter.
David Holdsworth, chief operating officer at the Charity Commission says: “Working with a company may bring many benefits for a charity including raising funds and increasing awareness of the cause. However a charity’s name and reputation are valuable assets which trustees must protect.”
What does the energy regulator say?
The energy regulator has today said it won’t open an investigation into E.on and Age UK’s marketing of tariffs.
An Ofgem spokesperson says: “Ofgem has looked into E.on’s marketing of its tariffs with Age UK and concluded that there is no case to open an investigation.
“We have written to all suppliers reminding them that relationships with charities and other trusted organisations require appropriate oversight.”
What does Age UK say?
A spokesperson for Age UK says: “We welcome the Charity Commission’s report about Age UK’s trading activities and Ofgem’s report also published today.
“We are especially pleased that, with respect to the Age UK energy tariff, Ofgem has found no breach of the regulations, and that the Commission has addressed the misconceptions about pricing and has acknowledged that the tariff had regard to the particular needs of older people.
“'We accept we can never be too transparent and our trading arm needs a sharper demarcation from the Age UK charity.”