Firing line; price comparison sites face parliamentary scrutiny
The firms are accused of hiding the cheapest tariffs on their sites from consumers looking for the best energy provider deals, and surreptitiously promoting inferior offers in return for a premium from suppliers.
Representatives from the ‘Big Five’ comparison sites faced questions from the Energy and Climate Change Committee in a one-off session. In attendance were;
- Peter Plumb, chief executive, MoneySuperMarket
- Steve Weller, chief executive, uSwitch
- Paul Galligan, managing director, Compare the Market
- Martin Coriat, chief executive, Confused
- Phil Morgan, chief operating officer, Go Compare
Committee Chairman Tim Yeo asked whether they believed it was wrong that the cheapest tariffs were being concealed from consumers. He closed his opening remarks by condemning the firms for “calculatedly disingenuous behaviour”, and noting that the industry only began making moves towards increased transparency after being “rumbled” towards the end of 2014.
John Robertson, MP for Glasgow North West, demanded the firms apologise for their conduct, declaring that the time had come for the industry to be reformed and regulated.
“I do apologise…we will compensate,” responded Steve Weller, chief executive of uSwitch. However, no other executive followed suit, repeatedly declaring themselves “forces for good”. They claimed the comparison industry had collectively helped over two million households to switch their energy supplier last year, saving customers over £400m, and that their model allowed smaller suppliers to challenge the monopoly of the Big Six energy suppliers. Tariff omissions were defended on the basis that not every energy company wanted to be passed customers in large numbers by the sites.
Reaction from consumer groups has been hostile. “The Big Five were caught red-handed, misleading customers online and over the phone,” said Will Hodson, co-founder of The Big Deal. “It’s shocking that only one of these giant companies has actually apologised. It’s not good enough. They must all apologise, stop hiding deals and publish all their commissions.”
uSwitch moved quickly to issue a statement following the committee hearing, stating “[our] policy has always been to consider compensation in circumstances where customers have suffered a direct financial loss as a result of a switch that our telephone contact centre has processed not in line with our strict procedures. For any customers concerned, please contact us at firstname.lastname@example.org and we will investigate.”
In written evidence submitted to the committee on January 27th, industry regulator Ofgem stated it will enhance the supervisory framework governing the conduct of comparison sites in March. The new guidelines will;
- Ban partial views – meaning sites must show all tariffs available on the market
- Make commission arrangements completely transparent – with sites obligated to outline the commission they make from sales
- Ensure full commercial relationship disclosure – sites required to prominently display a list of suppliers with whom they maintain agreements
The committee is expected to publish its recommendations later this year.