Saturday 3 December 2016

Time to switch service providers

In our tough economic climate increasing numbers of people are changing service providers such as mobile phone networks. The reward is often an immediate saving in costs writes John Cradden

Published 02/02/2010 | 05:00

Switching to save: little Conor McGuirk pictured recently promoting a combined TV, broadband and telephone package from UPC
Switching to save: little Conor McGuirk pictured recently promoting a combined TV, broadband and telephone package from UPC

ANY household looking for a relatively easy way to save some cash this year could do far worse than join the rising numbers of consumers who are switching service providers in search of better value.

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A large survey from last August commissioned by the National Consumer Agency (NCA) revealed that more than 80pc of consumers who have switched service providers did so in order to get a better deal, with roughly the same percentage managing to save money as a result.

Mobile phone networks remained top of the list of providers that consumers have switched from, according to the survey, with over one in four (28pc) saying that they have done so, followed by car insurance (26pc) and main grocery shop (22pc).

However, broadband is the service sector now experiencing the fastest growth in consumers switching providers, up to 14pc, a rise of 8pc compared to the NCA's last such survey in 2008.

The survey also hinted at a significant growth in the numbers switching electricity providers: 4pc of customers have switched providers over the past 12 months, with a further 12pc planning to change their electricity supplier in the coming year.

Ireland still lags behind other EU countries, such as Britain, in terms of switching activity in general, but the clear message in the tough economic climate is that people can begin saving money almost immediately, says Alex Hunn, director and co-founder of price comparison site, uchoose.ie.

"Changing provider is not difficult although it does require a little effort. But if you can reduce €200 per service, that's a massive saving," he said.

Broadband is a service that definitely has strong switching potential, says Mr Hunn.

"Price plans are often changed and move quickly without consumers being aware. The best deal now could be old in six weeks.

"From our own stats, we see between 7pc and 8pc of broadband users switching per year. This is below comparative figures in Britain."

Insurance is another service that should see more switching, particularly as they lend themselves well to like-for-like price comparisons.

"Varied product and price offerings throughout the year mean the consumer can get more value and save money by switching rather than remaining with the same provider," says Mr Hunn.

James Doorley, chairman of the Consumers' Association of Ireland, says the growth in options for switching is one of the most positive developments for consumers in recent years.

"Competition and the possibility that consumers can vote with their feet and move suppliers should ensure that they are more responsive to customer needs," he says.

The most recent study by the European Commission shows that the level of switching for things like mobile phones, fixed-line telephone and internet services in Ireland is respectable compared to other EU countries, he says.

However, Mr Doorley warns that there is very often the "illusion of choice" because consumers can find it very difficult to compare products and services.

In addition, consumers are concerned that switching will be difficult and will have negative consequences.

"For example, many people still believe they will lose health insurance cover for a period if they move provider even though this is not the case," he says.

He adds that sometimes providers will actively try to prevent switching.

"We know that the only independent study of the Irish Bankers' Federation switching code for personal accounts (by the Financial Regulator) found that 41pc of branches were not applying the code, so even when consumers want to switch, sometimes they are obstructed," he says.

Furthermore, the same recent EU Commission report found that large numbers of consumers in Ireland said they thought it would be difficult to switch bank accounts.

Mr Hunn says that switching to a new bank can be harder than for other services because it requires a physical visit and is not something that is easy to do entirely online.

"Credit cards would be a huge switching potential as this is something that consumers can save a huge amount of money on by moving to a 0pc balance transfer card for six months," he say.

"Places like the UK offer more online banking options, which Ireland lacks here, and the large players are all very much focused on customer retention at present which will make switching harder," he says.

So although more could still be done to make switching easier for consumers, it clearly makes sense to consider all your options, and switch if you find a better deal

Irish Independent

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