Is Which? wrong to recommend MLM Utility Warehouse? Is it really a good energy provider?
Find out whether consumer champion Which? is wrong to recommend MLM Utility Warehouse, and whether the company is a good energy provider.
Every year consumer champions Which? publish their list of recommended energy suppliers. And pretty much every year, a familiar name appears near the top: Utility Warehouse.
This year, Utility Warehouse is ranked third out of 18 energy companies, rated by 8,390 members of the public in the annual Which? customer survey.
Which? say they base their ranking on two things:
- Their customer satisfaction survey
- Customer service procedures that are in the best interest of customers
Given that Utility Warehouse are towards the top of this survey seemingly every year, you would be forgiven for believing they are a good choice for your energy supplies. But there’s a big problem with Utility Warehouse that, we believe, makes Which?’s survey inaccurate and misleading. (And in Which’s own words, not “fair”.)
What is this problem? Utility Warehouse is an MLM.
Why does it matter that Utility Warehouse is an MLM?
So why does it matter that Utility Warehouse is an MLM? It matters because it gives them a huge, unfair advantage over other utility companies in a customer satisfaction survey.
Let’s face it, paying for utilities isn’t fun. In fact, the only time we ever usually think about or need to contact our utilities company is when something goes wrong, or if we think we have been charged too much money.
So we’re not particularly inclined to like our utilities supplier, especially if they are a large company with impersonal customer service. And particularly recently with the increased cost of energy.
This means that a customer survey of most energy companies would be at best indifferent, and at worst critical.
Utility Warehouse, on the other hand, has a significant advantage over every other utility supplier in the UK. As far as we are aware, they are the only utilities MLM, and that means their customers are also the people who sell (and therefore make money from) their service.
Currently, Utility Warehouse have over 45,000 Partners (self-employed sales agents) who are financially incentivised to give the company a high score. They will also encourage the friends and family they have signed up to do the same.
So surveys and competitions that rely on public voting or responses, like Which’s energy supplier survey, are automatically skewed by allowing an MLM to participate because many of the customers are also the people SELLING. And they want to win, not because their company is the best, but because they want to make money.
Utility Warehouse Partners make more than £250 from every customer who signs up
So how incentivised ARE Utility Warehouse Partners to help the company rank highly on Which?’s survey?
According to their website, Utility Warehouse Partners earn £250 to £300 per customer who signs up to the company. Partners are encouraged to “Help customers see the full value of UW and switch to as many services as possible” so they can “get more commission”.
They are also incentivised to keep customers with the company, as “Once you sign someone up, you’ll get a % of their monthly bill paid to you as a monthly commission for as long as they remain a UW customer.”
So not only does a Utility Warehouse Partner earn a one-off payment for every customer they sign up, but they earn a percentage of their customer’s monthly bill, for as long as they stay with the company.
The other utility companies in Which’s survey don’t have the same business model, as far as we are aware. This leaves them at a distinct disadvantage, when compared to a potential 45,000 plus Partners highly motivated to keep Utility Warehouse ranking highly – irrespective of whether it actually deserves it.
Which? know their survey is not “fair”
It is disappointing to see an organisation as influential as Which? include Utility Warehouse in their survey, especially as they are aware of the potential lack of a level playing field.
In March 2019, we wrote to Which? to explain why including an MLM like Utility Warehouse in their annual list of recommended energy suppliers was misleading.
Here is an excerpt from our email:
From research, it appears that UW is the only MLM company in your energy survey, and therefore it has a significant unfair advantage. In 2017 there were 41,717 people in the UK who were both consumers and sellers of UW (Partners). These people, plus the close friends and family who are their customers, are highly financially motivated to ensure that UW tops your survey.
All other non-MLM companies in your survey rely on the goodwill of genuinely happy customers. Yes, the occasional staff member may slip through your net and give their own company a high score, but this pales into insignificance when compared to the 41,717 UW Partners.
This is why any competition or survey, like yours, that relies on customer voting or feedback becomes invalid when MLMs participate.
And this is particularly important with Which? because of your reputation – and the power your endorsement has. Indeed, as you can see from the attached screenshot, UW use your endorsement on their recruitment page to lure new people in to sell for them.
Which? confirmed that they could not be sure that Utility Warehouse Partners were not skewing their survey, conceding: “Unfortunately, it’s quite hard to determine if there are Partners that are filling this information in.”
The Which? representative I communicated with also said:
“With all the information that you’ve given us, you bring up a really valid point. However, I’m personally not in a position to comment about this. I’m going to forward your comments and your reviews that you’ve made over to our researchers for future information.
“I agree that having just one of the MLM industry organisations in our survey isn’t fair as we could also review other MLM companies to see if the results are similar. I’d like to thank you for bringing me all this information and I’m sure our researchers will find this incredibly interesting and may help change the way that our reviews are conducted in the future.”
Sadly, Which? have clearly decided not to act on this knowledge and still conduct a survey that, in their own words “isn’t fair” as it includes an MLM.
In 2020, the year after our email, Which? even named Utility Warehouse its Utilities Brand of the Year! (This is the same year Utility Warehouse had to pay £650,000 for price cap overcharging, as we’ll reveal later.)
Should Which? recommend Utility Warehouse’s customer service?
So we know that one factor that Which? base its rankings on (a customer survey) is not “fair”. But what about the second factor: the company’s customer service procedures?
If you look at Utility Warehouse’s website, it looks like a friendly company who are ready and willing to help customers. They have an online form to fill in, live online chat, and a UK-based customer service team with a phone number to call them on. Their helpline is open Monday to Saturdays and on bank holidays.
They share helpful information, such as how to read your meter and where to submit the reading. And their FAQs cover pretty much every possible question and situation you can think of.
So what is the reality of being a Utility Warehouse customer? To find out, we looked at two sources: Ofgem, the energy regulator, and a Facebook group of current and former Utility Warehouse customers.
And what we found was shocking for a company Which? rank so highly – and by virtue of this appear to recommend.
Utility Warehouse were fined £1.5 million for issues relating to customers in debt
In 2021, Utility Warehouse were fined £1.5 million for issues relating to customers in debt after an investigation by Ofgem, the energy regulator.
According to Ofgem, “Utility Warehouse failed to treat some of its customers fairly and to offer services and support to those in payment difficulty in all cases. And “Customers were not consistently offered services, such as debt repayment plans and energy efficiency advice, which left some of its customers disadvantaged.”
Utility Warehouse were also one of 18 energy suppliers forced to pay £10.4 million for contract renewal failures in 2021. Ofgem found the suppliers “did not adhere to price protection rules, which protect a customer’s tariff price when they decide to either switch suppliers or tariffs after a price increase”.
Strangely, Which? doesn’t mention either of these fines in its profile of Utility Warehouse (despite having updated its profile since these fines were issued). However, it does note that Utility Warehouse had to pay £650,000 for price cap overcharging in 2020 – the same year Which? named Utility Warehouse its Utilities Brand of the Year.
Ofgem also criticised Utility Warehouse for “readily resorting to installing prepayment meters by force for customers who are in debt and not as a last resort as Ofgem requires”. Ofgem discovered that “Utility Warehouse installed the highest proportion of prepayment meters for its newly indebted customers, with over one in four of these customers subject to this treatment.”
Does any of this sound like the actions of a company with “procedures that are in the best interest of customers”? True, Utility Warehouse aren’t the only company to be fined. But they stood out as being the worst, according to Ofgem, when it came to treating customers in debt – to the extent that Utility Warehouse paid £1.5 million to close an investigation.
It’s certainly not the behaviour of a good energy provider in our opinion, or a company we would recommend.
Customers’ experience of energy provider Utility Warehouse match Ofgem’s findings
It appears that Utility Warehouse haven’t improved their customer service since their dealings with Ofgem. When we asked to hear about customers’ experiences in a Facebook group set up to help people with problems with the company, we continually heard a similar tale.
The general consensus is that Utility Warehouse offers poor customer service; delaying installations of meters, installing the wrong equipment etc. They also don’t seem to use meter readings provided by customers, so customers underpay for several months before being hit with a significant bill. And when they can’t pay the bill, Utility Warehouse takes prompt action, cutting off services and pursuing debt.
One customer suggests this is a deliberate strategy by Utility Warehouse to make it look like they are cheaper than they really are:
“They underestimate people’s usage so it makes them look like they’re getting into a ‘cheaper’ plan then, towards end of that person’s contract, they hit them with a catch up bill. They have their own debt collection side of the business too, so if people don’t pay their bills because they’re tied them into overpriced broadband mobiles etc, then they cut them off.”
Here are some experiences of Utility Warehouse shared with us. For transparency, these were shared with us in a group for unhappy customers, and we have no means to independently validate these experiences, but in our opinion they do appear to reflect how the company operates based on their Ofgem fines.
“Worst thing I ever did”
“I only joined to help a friend. It was the worst thing I ever did; they kept putting the charges up to ridiculous amounts for a one bedroomed flat with no central heating or hot water plus only occupied in evenings. Been in dispute now for nearly 12 months and all I get is threats. Contacted the friend they just said sorry nothing I can do as out of my hands now.”
“I rue the day I joined them”
“Basically they are badly run. They issued a monthly bill for approximately £1,800 which equates to over £21,600 per annum for a one bedroom flat! The issue lies with the meter readings and their ability to rectify it or engage in rectifying the issue.
“Each time I speak to them, they ask for updated meter readings which I have supplied previously and images of the meter readings which again I have sent! They then say that this information has been sent to an anonymous department to review! I cancelled my direct debit for fear of them withdrawing £1,800 out of my account!
“I have paid £300 for the last two months for fear of going into debt! No one at UW will take ownership and solve this issue! I have raised a complaint with them ignoring that and have now raised a complaint with the energy ombudsman but not sure whether this will resolve anything! Awful company and rue the day I joined them!”
“An appalling lack of joined-up internal communication”
“I have had a good experience with them for some years. They were also excellent with my house move and getting broadband up and running alongside phone etc. I had two homes with them over three months in the transition period, and that was when my troubles began. They continued to charge me on my old property on estimated energy readings for three months after I left it and gave them final readings.
“The issue was communication…every time I called I spoke with a different person. All helpful and determined to sort it for me. But each time it didn’t happen. They were frustrated too. I think the issue is an appalling lack of joined-up internal communication. What the initial contact activates by passing it on to another section seems to get lost on the way. It is now sorted, but it took a ridiculous amount of time – over an hour three times on the phone plus many emails. So frustrating.
“They are working ILLEGALLY and getting away with it”
“I have been trying to cancel Utility Warehouse since I signed up to them. I am within the two weeks cancellation period but they will not cancel the contract. I have sent by post two cancellation letters, one of which was sent by recorded delivery. I have phoned umpteen times. You can’t get through to the cancellation department. I honestly don’t think it exists. They are working ILLEGALLY and getting away with it.
“There is no direct route to cancellation team”
“UW are a poorly organised bunch. I think that their success may well have been their undoing. Been with them for 10 years and it wasn’t bad in the beginning but not we have left them and cancelled all services. Nightmare process as there is no direct route to cancellation team. The only way is by phone and as I type I have been holding for 35 mins. I certainly would not recommend them at all.”
“They charged me over £3,000 [for a faulty meter]”
“My meters were running fast and engineer removed them. They charged me over £3,000, when I rang they said my meters were replaced and there was no longer any proof they were faulty and sent me a final demand!! I’ve moved home and am no longer with them, thank god, but they are still demanding monies.”
‘They won’t give me my credit back’
The issue I had at the start was that if you have your gas, electric, phone and internet with them in one bill, it is precisely that: one bill. It’s not that I don’t want to pay my bill. But when I’ve been with other companies, if it’s late payment etc they just add it on to next months. It’s never been an issue. But I was six days late and they shut my internet off and I couldn’t make or receive calls on my mobile.
“I asked if I could pay separately and they said no, so by me being late on the gas/electric bill, I also had no internet or phone but, like you say, you’re in a contract. Well I didn’t care. I took my internet and phone and went with another company after three months and told them I’m not paying the early charges as they never explained the deal properly.
I also gave readings and they just seemed to ignore and say we’re taking more money so you can build up credit. But I don’t want to build up credit. That’s my decision. They also won’t give you the credit back. I’ve always rang other companies and got credit back within five days. No, UW say they’ll put it to next bill. And no it’s no cheaper, I got internet and phone for same price elsewhere.”
“I am currently preparing for legal action against them”
“A ‘friend’ signed me up at my old house just before i moved. I took Utility Warehouse to my new house, but the broadband didn’t work. They gave me a refund after six months of constant complaints.
“I don’t have gas, but had economy 10 (10 hours of off-peak). But they wouldn’t take meter readings or believe me when I emailed them in. This went on for months, during which they visited my house several times to “check” my readings.
“After escalating my complaint (some 40 hours on the phone and lots of emails later) they decided my meters were faulty and I had to have a smart meter installed. This was for economy 7 (three hours less off-peak) and was apparently the only solution.
“They attempted an installation on four separate occasions, not bringing the correct meter, saying it was a complicated job etc.
“When the meter was finally put in, I had no off-peak, so had to use peak power for my heating and hot water. Lots of calls and emails later they “fixed” it. But now my off-peak circuits were on 24/7.
“Eventually, they realised my meter profile had been wrong since the day they took over and this was the source of all my issues. I asked them to review my account (by my reckoning they have overcharged me by well over a thousand pounds) but they wouldn’t!
“I am currently preparing for legal action against them.”
‘The ombudsman upheld my complaint’
“I have had nothing but problems with them. I have been to the ombudsman once who up upheld my complaint. They miss-sold me. I thought I was paying for the amount used each month, but it turns out I was on a budget and now, because of them, I’m in a £700 pound debt and can’t leave until it’s paid.
“I can’t afford that. I’m a vulnerable person with COPD and emphysema plus sleep apnea. I have a CPAP machine I have to use every night. I have asked them to come and take their meters out because I would rather go without then pay this pyramid company anymore of my money.
“It’s taken me two months to get my wife’s name taken from the bills, and I have been waiting three months to get everything they have on me to do with GDPR as they have been sending letters to an address I have never lived at.
“Octopus energy said they’d take me on but Utility Warehouse won’t let me leave. I really think they need shutting down. So far I have managed to stop at least 150 people from joining them. They say they are cheaper than anyone else, which is a lie.”
“The whole company is a joke and just constantly lie”
“I’ve got a complaint with the ombudsman. Was harassed by a woman on Facebook, because I had issues with a previous supplier (now fully resolved) I ended up going to her. She VASTLY underestimated my usage, I’d explained the situation including I’m a parent carer.
“Due to her error and not doing her job properly I’ve got £1,000 debit (not all of it was her, UW as a whole are poor communication with customers and generally inept) the whole company is a joke and just constantly lie.”
“UW must be sitting on millions of our money”
“I closed two business accounts in August. Hours of phone calls, loads of promises, sent photos of readings. Then in December a complaints person, after chasing phone and emails, told me, “We owe you £3,750”.
“One day later I was told, “No I got this wrong, it’s £1,580 and I can pay you today.” After a week I received no money so chased him again. I was told, “The last team to sign off said no, they want to see your December bill”.
“I informed him I have no account; it ended in August. He told me to go to the ombudsman. UW must be sitting on millions of our money”.
‘They charged us £4,000 for gas when we had no gas supply!’
“We had them through OFGEM. Charged us £4,000 for gas….. from 2015.
“Now one, the house was derelict and unoccupied for 40 years. We moved in in 2021. And two, there is no gas supply within seven miles of the very rural house that they claimed we used. We don’t have a meter and they made one up.
“They kept making us wait a month to fix the billing and then didn’t. Threatened me with cutting off my mobile and electric to a PaG meter. Threatened to take to court.
“We got in contact with the company that supplies gas (as in the regional one) to confirm I gas pipelines in the area, it took them well over nine months and HOURS on the phone to get them to refund and sort the bill out.
“I have been a customer for 10 years so they also had our previous house details and bill history. All paid up to date and monthly readings as well as a smart meter. So the fact they just added it to the bill randomly is beggars belief.
“The stress and anxiety it caused me was unreal (had a bad break up years ago that left me in debt, so I have worked hard to ensure I am never in that position again). I have two months left on my mobile and then will be leaving.”
“I had to get My local MP, the Citizen’s Advice Bureau, local press and even Watchdog, Rip Off Britain to name and shame this pyramid of a company”
“I moved to a new house in November. UW were the supplier, and I requested a switch to my previous supplier, British Gas, which was meant to switch in early December. However, UW objected to the switch on four occasions for no reason.
“I telephoned them every day for a key and card, and was told several times they sent five, two allegedly by special delivery but they never arrived. Several days later we eventually received the card but in between this we had eight engineers to our house to put credit on the meter.
“The staff lie all the time, it must be part of their training. I eventually switched on just before Christmas, but not before I had to get My local MP, the Citizen’s Advice Bureau, local press and even Watchdog, Rip Off Britain to name and shame this pyramid of a company, because that’s what they are.
“I was fuming when I saw the CEO bragging about UW and the profit they have made through us during these hard times on Sky News, I lost count how many times I emailed him with no response at all. One of my complaints was resolved (informed by email) without discussing with me if I was satisfied with the outcome.
“Eight days during the coldest time we’ve had so far and we had to be out of gas before they would send an engineer. We had to wait between seven to 10 hours to get heating. UW should not be in business. They have no customer service skills and treat their customers with contempt, including the vulnerable.”
“I’m really struggling mentally with this company”
“I signed up with them when I moved into my house in September and immediately asked to be changed over to pre-payment. They said yes and sent pan numbers and gas and electric cards and all the problems started to get worse.
“As an example, on my December bill they are charging me for gas for October that I already paid for in my October bill, and the amount and meter readings are completely different to the October bill. They said I keep getting billed because on the bills it states payment method as direct debit and they said they would change it to prepayment and it would all be sorted and done on December bill, but it’s not.
“I put a formal complaint in in October. I also sent my complaint to their online form on their app. All I get back is an automated response saying they will get back to me within days, but never have done.
“It has been the most awful, stressful time, having to call them for hours on end, (I have pictures of some of the calls’ duration). They have ended calls on me and called me a liar and i was called “ARSY” by one adviser who thought he’d put me on hold to speak to another department but he didn’t.
“I’ve spent an estimated total of 20+ hours on the phone getting passed from pillar to post. I came off the phone crying and upset about the way I was spoken to; their customer service is truly awful.
“On quite a few occasions I was promised faithfully a call back which never happened. I also requested my DSAR and phone transcripts in October and heard nothing back. I feel that they are deliberately withholding my personal information.
“I literally haven’t got any minutes on my phone to call them and it’s too stressful. I’m really struggling mentally with this company as it’s one thing after another. All this shouldn’t be happening as I’m on prepayment.”
The customer who sent the above experience also shared her notes of all her phone calls with Utility Warehouse, and screenshots of her account threatening her with disconnection if she doesn’t pay.
Is Utility Warehouse a good energy provider? How does it work?
One of the reasons why Utility Warehouse are being recommended so often on social media right now, is that their Partners claim they can offer customers a better deal than they are being offered from their existing suppliers. And with the cost of energy rising so dramatically, this can seem like a tempting offer.
But as with most MLMs, not everything is as it seems with Utility Warehouse, according to their customers and former customers.
The business model appears to work by encouraging customers to move as many utilities as possible to the company. Here’s what they say on their website:
“Switching your energy, broadband, mobile and insurance to UW can save you up to £506 a year. Including a free £50 credit when you take a UW Cashback Card.
“The more services you switch, the more you’ll save.
“Plus, we’ll bundle everything onto one simple, monthly bill. So no more dealing with multiple accounts.”
The problem with this model is that it seems that Utility Warehouse don’t necessarily offer the best deal in all utilities. So where they may provide a good deal on one service, you can pay more in another. Anecdotally, ex-customers seem find that they save money when leaving the company and negotiating their own separate deals.
But the biggest issue with the company when it comes to acting in good faith, in our opinion is its MLM business model.
Utility Warehouse Partners earn ‘less than £10 a week’
We know from investigating MLMs over many years that they aren’t quite the income opportunity they claim to be. Research published on the FTC website discovered that, on average, 99.6% of people who join an MLM will lose money when business expenses are deducted. And every investigation we have conducted shows a similar poor financial outcome.
And according to an investigation by The Guardian, things aren’t much better at MLM Utility Warehouse. They found that “the average amount being earned appears to be less than £10 a week”. And this will be before business expenses are taken into account – including the fees you need to pay Utility Warehouse.
The Guardian also note that if a customer cancels their contract or defaults on their first bill, the Partner is “stripped of the customer gathering bonus” they received. This means they are highly unlikely to be impartial if a new customer has second thoughts about whether the company is right for them and asks for advice.
The lack of real income earned by Utility Warehouse Partners (according to The Guardian) can also potentially make them more desperate for money – and more inclined to miss-sell, as several customers complained to us had happened.
Utilities Warehouse Partner convicted of stealing from a customer
Another big problem with the MLM model of companies like Utilities Warehouse is that it can leave customers vulnerable when disclosing financial and other information – as happened to one customer in 2018 when a Utility Warehouse Partner stole money from her.
Vincent Daly set up a Utility Warehouse account for Sue Weaver, who had just lost her partner, and took a note of her password and bank details. He then made more than 50 payments to his PayPal account totalling £12,500. (This man has apparently joined another MLM since his conviction.)
While Utility Warehouse cannot be held directly responsible for this man’s actions, their business model gave him access to a vulnerable person and her financial details so he was able to commit this crime. Which is possibly why they had to reimburse the victim.
What do we believe Which? should do about Utility Warehouse?
We believe that Which? should either reconsider allowing an MLM company to participate in its survey, as it acknowledges that it has no idea who is actually responding to their survey. Or they should revisit how they rate energy suppliers.
Because their current method of reviewing companies, in their own words in an email to us “isn’t fair”. Personally we find it shocking that an organisation that claims to be “the UK’s consumer champion… here to make life simpler, fairer and safer for everyone” is happy to recommend an MLM company like Utility Warehouse using such a flawed system.
We’ve emailed Which? this article
We have emailed Which? about our concerns and sent them a link to this article. They responded in an email, saying:
“Thank you very much for taking the time to email us your thoughts on our MLM Utility Warehouse reports, it’s great to hear from you.
“At Which? we strive to ensure we offer the strongest possible support to our members and UK consumers; insightful feedback such as this plays a vital part in improving our services for everybody, so I’ve passed your comments and link to our research team to investigate further.
“You’ll only hear from them if we need to follow up with you directly, but rest assured we’ll ensure your voice is heard by the relevant people.”
We will keep this article updated if Which? contact us with any further news. In the meantime, we will keep a keen eye on their energy suppliers rankings.
Photo by HUUM