Vulnerable people in Scotland are failing to get a good deal on household services because providers are so focused on targeting wealthier groups, a watchdog has claimed.

Residents from deprived areas are less likely to switch suppliers of gas, electricity, telephone services, internet, and mortgages for better quality and lower cost.

The claims came in a paper from the Scottish Consumer Council (SCC), which questioned 1,000 people as part of the study.

Douglas Sinclair, chair of SCC, said suppliers were ‘missing a trick’ by not working harder to persuade people on lower incomes to switch companies.

‘The relative lack of mobility between suppliers for people on low incomes seems to be down to a reluctance of some providers to make them welcome,’ he said.

‘This is ignoring the fact that things like electricity and gas are essential and, however small the household budget, people make sure they have enough to pay their bills.

There are huge commercial benefits to be had from tailoring services to reach out to the low-income market.’

Around 11% of Scots do not have a bank account, rising to 18% of those on low incomes, the SCC said.

Despite this, many suppliers provide much better deals to people paying by direct debit.

Almost 10% of Scottish households are in debt for electricity compared with 5% for Britain as a whole.

According to Energywatch, 650,000 households, almost a third of all Scottish homes, are estimated to be in fuel poverty.

The paper also found that people in rural areas such as Highlands and Islands were less likely to switch providers.

‘The irony is that the demand from and the purchasing power of disadvantaged consumers are strong simply because of the essential nature of the services involved,’ it said.

SCC called on the Scottish Government to establish a task force comprising energy regulator Ofgem, industry representatives and consumer groups to provide a gas and electricity market that works for all residents.

The UK and Scottish Governments should set up a UK trust fund financed by a levy on industry to provide financial support for consumers who are in fuel poverty, it added.

Making markets work for consumers in Scotland, www.scotconsumer.org.uk

by Barry McCarthy
barry@newstartmag.co.uk