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Energy auto-switching sites ‘can leave customers paying more’

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03/03/2020
Energy switching sites claim to get customers the best deal, but an investigation reveals billpayers could pay up to £70 more than if they made the move themselves.

The first auto-switching service launched in 2016 and since then, a host of sites have popped up, monitoring the market, automatically moving customers to the best tariffs and taking care of the move for them.

While they claim to cover most of the market, some energy auto-switching services are comparing fewer than 15 out of around 70 suppliers.

This means some customers are paying £70 a year more than if they’d found a better deal and switched themselves, according to a report by charity Citizens Advice.

It found some were even listing firms that had gone bust while others were providing inaccurate or unclear information, making it difficult for consumers to make informed choices about using the service.

Around 300,000 people use auto-switching services and around seven million use third-party services including comparison sites, but they are not currently regulated.

Citizens Advice is calling on the government to ensure consumer protections are “fit for the future”, bringing them in line with other markets like insurance given the rapid growth of the market.

It said people can face serious problems which are difficult to resolve. In one case seen, an auto-switch site failed to cancel a switch, leaving customers stuck with a supplier they were unhappy with or facing exit fees. In another case, consumers lost some of the services they relied on as a result of being switched without warning.

‘Better safeguards for customers’

Gillian Guy, chief executive of Citizens Advice, said: “The lack of regulation leaves people facing potentially serious problems and a lengthy and difficult path to resolving them. As more people use these sorts of services, it’s essential that better safeguards for customers are put in place now.

“The government has an opportunity in the upcoming energy white paper to fix current problems and make sure the right consumer protections are in place as the UK moves to a zero-carbon future.”

Alex Dickson, head of research at auto switch site Switchcraft, said: “Auto switching has revolutionised the UK energy landscape by helping hundreds of thousands of households engage an overly complex utility market and cut their energy bills by some £80m.

“Switchcraft supports any new rules aimed at improving consumer access to better energy services and cheaper deals, including regulation for third parties. As with any new industry, not all players are getting it right all of the time.  And after decades of ring-fencing customers, energy suppliers are now coming to terms with a new more flexible switching system.”

See YourMoney.com’s Which energy switching firm is best for you? for more information.

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