New suppliers have provided much-needed competition in the energy market, often undercutting the prices of the Big Six – British Gas, EDF, Eon, Npower, ScottishPower and SSE.
But some of the entrants, poorly resourced and woefully capitalised, have not lasted long.
Hit by rising wholesale prices and ever-increasing payments to the Government, they have gone into meltdown.
Over the past 12 months, nine suppliers have gone bust, the latest being Economy, which had 235,000 customers.
Although regulator Ofgem has promised to tighten the rules governing the granting of licences to new suppliers, it will not stop some existing companies from going bust, or their customer service standards plummeting.
In this special investigation, Toby Walne pays an unscheduled visit to some of the smaller suppliers to see with his own eyes whether they look either fit for purpose or just tin-pot operations. Jeff Prestridge, meanwhile, runs the rule over the finances underpinning these businesses – and their customer service standards.
Outfox The Market
Entered market: September 2017.
What our reporter saw: Worryingly, my car’s satellite navigation system takes me to a derelict building site close to Leicester city centre. Has Outfox the Market, the company I am searching for, already been bulldozed out of existence without me knowing about it?
On the other side of the road is what looks like an abandoned cotton mill overlooking the Grand Union Canal. On it is a graffiti-emblazoned sign: ‘Fischer Energy: Powering the Future’. Perhaps this firm can help?
Walking through the iron gates a huge garage with shutters looms. I am at the exotically named Frog Island, a run-down industrial estate surrounded by crumbling Victorian buildings and broken windows.
Behind the garage is a modern glass-fronted reception with a Fischer placard. My arrival is met with a stony face and I am told not to move. A receptionist shuts the door on me and turns her back as she whispers into her phone.
Outside are two empty directors’ parking bays – with an electricity point in the centre for recharging vehicles.
Suddenly, surreally, a man who looks like a rock star pops out of the office. He is Tom Nurse, who I soon discover is lead singer of local band The Atlantics. He has a natty haircut and seems to have poured his legs into drainpipe jeans.
He whisks me off to an austere side room and explains he is communications manager for Outfox the Market.
In response to a recent wave of criticism from Outfox customers about woeful customer service and steep increases in direct debit payments (highlighted in The Mail on Sunday), Nurse is reassuring.
He says: ‘Service levels are back to normal. We admit to there being problems before Christmas and apologise for this. We have to adapt to be a sustainable business and we have a bold and brash model like Ryanair that is all about saving customers money.’
He then hands me over to the company’s head of customer relations who shows me a room of 35 staff manning the phones.
Outfox the Market, it transpires, is one of a family of companies owned by local entrepreneurs Keith and Maria Bastian, including Foxglove Energy Supply and Fischer Energy.
Indian-born Keith Bastian is 53 and has lived in Leicester since 1991 with his Spanish wife Maria, also 53.
He was UK sales manager for German heater company Wibo, before quitting in 2010 and setting up his own business supplying heaters. He then bought Fischer, a rival of Wibo. From there, his next step was to branch into energy supply.
Bastian is not frightened to speak his mind, in the past accusing the ‘Big Six’ energy suppliers of ‘acting like monsters’. But what of Outfox?
What the financials show: Outfox is classified by Companies House as a ‘dormant company’ – one not doing any business. Its latest accounts to the end of June 2018 confirm it has assets of just £2.
Of the 15 companies where Keith Bastian is a director and accounts have been filed at Companies House, only one has disclosed a profit – Fischer Future Heat UK.
Customer service: Website energyhelpline currently gives Outfox a star rating of one out of five – its lowest score. Review website Trustpilot is awash with customer complaints – ‘truly a shambles of an energy company’ while unhappy customers have also launched a 1,000-strong protest group on Facebook.
The Mail on Sunday has been inundated with correspondence from unhappy Outfox customers.
Entered market: September 2013.
What our reporter saw: The Chatterley Whitfield colliery in the Staffordshire city of Stoke-on-Trent is a ghostly ruin from a bygone era – having shut down in 1977.
The historic rusting complex is now fenced off but the colliery office is still open. It is a tired-looking art deco building with 30 offices rented out to small businesses. Go Effortless is among them – others include Wish Upon A Wedding and Laptop House.
The building is deathly quiet with only half a dozen vehicles in the car park. No one answers the door bell for Go Effortless.
A separate ‘reception’ buzzer goes straight to an answer machine. A cleaner eventually comes out of the building for a cigarette break – but will not let me in. He says: ‘I have never heard of the company.’
There is no sign of any back-office operation unless it is underground.
Team work: Go Effortless is run by husband and wife team Andrew and Melanie Burns
Go Effortless is run by husband and wife team Andrew and Melanie Burns. Andrew, 45, has a background in electronics and three degrees to his name.
Melanie, 37, is an accomplished photographer.
The couple were inspired to set up their energy firm after becoming frustrated with the big suppliers.
The couple have a big heart outside of work, supporting a local good cause – the Alice Charity – which aims to help families that are struggling on low incomes.
What the financials show: The company behind Go Effortless is Effortless Energy Limited. Financial accounts for the year to the end of September 2017 show profits of £20,358. The average number of persons employed during the year, including the Burns, was three. Companies House indicates the couple have no other directorships.
Customer service: Energyhelpline gives it two stars out of five – and there are no comments on the Trustpilot website.
Entered market: August 2016.
What our reporter saw: Tonik Energy’s offices are in Lombard House, Birmingham. As I arrive unannounced, the security guard is not impressed but I am allowed to sit in a large waiting area and enjoy a latte macchiato.
Co-founder Simon Perkins bounds down the stairs in a blue checked shirt. The 38-year-old boss, who in the past has worked for energy supplier Eon, an estate agent and an insurance company, greets me with a winning handshake.
Although obviously put out by my surprise arrival he takes me upstairs to reassure me there is more than a hamster on a wheel running Tonik.
It all looks fashionable – brightly- lit desks surrounded by plants, wooden picket fences and even a picnic rest area all made from recycled materials.
Reassuringly, I see some 30 people busy on phones – though I am told there are 80. Does Mr Perkins suffer from double vision or are there other phone operatives hidden away from view?
He says: ‘We do not wish to be tarred with the same brush as other small energy firms – and we have nothing to hide. This industry is not just about flogging cheap energy.’
Perkins offers a messianic message. He believes his customers can cut their energy usage in half within five years – through much-maligned ‘smart’ energy meters and the provision of different tariff rates according to what time of day or night it is.
He says: ‘Trying to grow fast as a business in this industry is wishful thinking. I have worked 18 years in the energy sector.’
His Apple Watch alarm gives off a piercing ring. What a coincidence. Time for me to say goodbye.
What the financials show: Tonik Energy is a subsidiary of holding company Retig (of which Perkins is a director) as is Locus Energy. In the 18 months to March 25, 2017, Retig incurred pre-tax losses of £1.443 million.
In presenting the accounts in June 2017, it says both subsidiaries have seen growth and will grow sustainably over the next three years.
Customer service: Energy- helpline awards it two stars out of five. Reviews on Trustpilot average four out of five.
Entered market: September 2016.
What our reporter saw: The bracing sea air sweeps off the English Channel on to Brighton Marina. Situated on the first floor of a massive complex it enjoys panoramic views of the sea and expensive looking yachts.
Operations chief Tom Nicholas directs me inside. Through a glass partition I see some 50 staff manning phones.
Nicholas is unfazed by my unannounced arrival – and is desperate to distance his firm from financially challenged competitors.
He says: ‘Our business plan is to be profitable within three years. I fear there are others out there buying apples for £1 and selling them for 95p to attract new customers.’
He adds: ‘It is a dangerous plan that could end with customers of good energy suppliers picking up the bills for the collapse of other minnow suppliers. Trying to always undercut on price is a race to the bottom.’
Nicholas claims the secret of success – and survival – for firms like his is ‘hedging’.
This is paying up to a year in advance for energy supplies at a fixed price to avoid being hit by higher bills later on, caused perhaps by a sudden hike in demand as a result of a surprise cold snap.
And the name Toto? Nicolas says: ‘We came up with it after a brain storming session – it does not stand for anything. But apparently in Swahili it means baby.’
What the financials show: A note to the accounts for the year to the end of April 2017 state that Toto Energy has ‘elected not to include a copy of the profit and loss account within the financial statements’.
Examination of the company’s profit and loss reserves – accumulated profit or loss – show a loss of £1.146 million. Companies House also confirms a charge on the business (filed in November last year) by energy wholesaler Contract Natural Gas Limited.
Directors of Toto Energy are Christopher Allen, 46 and Paul Fitzgerald, 44. Between them, they have a phalanx of directorships. Allen has ten and Fitzgerald has six.
Customer service: Energyhelpline gives Toto Energy two stars while Trustpilot gives it three. A recent post on Trustpilot talks of ‘shocking customer service and telephone wait times’.
Entered market: August 2015.
What our reporter saw: This energy firm is currently topping best-buy tables. It has attracted almost a million customers since launch.
Bulb is situated in a retro-70s office complex in London’s East End near Brick Lane market. It is all rather trendy as hipsters on laptops discuss start-up business ideas over caffeine-free infusions.
The receptionist – one of four – is surprised when I ask about Bulb. I am told to email the company.
Apparently Bulb staff are too busy to see me so I am left to stew for almost half an hour. Eventually, head of brand Clementine Hobson pitches up.
She is nonplussed about me turning up uninvited, saying: ‘You can email me or the press office, but you cannot talk to anyone now.’
The attractive young manager bats away my questions about Bulb’s finances, simply pointing out it employs 300 staff within the building. Proof, she says, that Bulb is no tin-pot outfit. I am sent packing.
What the financials show: The financials – on paper at least – do not look good. Accounts for the year to the end of March 2018 report pre-tax losses of £23.732 million.
Directors of Bulb Energy are Amit Gudka, 34, and Hayden Wood, 35. Gudka is a former energy market trader for Barclays who outside of work likes to spin records as a part-time DJ. Wood is a former management consultant.
Customer service: Bulb is shining bright, judging by customer reviews. Both Energyhelpline and Trustpilot give it five out of five. ‘Happy with the service and bills are clear,’ says one satisfied customer on Trustpilot.