MPs say comparison sites should compensate 'duped' switchers

The Energy and Climate Change Committee says some sites have used misleading language to "dupe" consumers into default options that only displayed commission-earning deals.

It is calling on Ofgem to consider requiring price comparison sites and other third party intermediaries to disclose the amount of commission received for each switch at the point of sale.

It also wants sites to use clearer language and for Ofgem to look into the possibility of introducing a licence-based system for price comparison websites or alternatively a licence requirement on energy suppliers to use only Ofgem-accredited websites.

Earlier this month representatives of the "big five" sites – Compare The Market, Confused, Go Compare, MoneySupermarket and uSwitch – told MPs they earn up to £30 in commission every time a customer switches to a participating provider, or up to £60 when a customer switches both their gas and electricity accounts.

uSwitch told the committee at the time it would compensate consumers who had been misled into signing up for an energy tariff that was more expensive than others available.

'Behaving more like backstreet market traders'

Committee chairman Tim Yeo says: "Consumers trust price comparison services to help them switch to the best energy deals available on the market.

"But some energy price comparison sites have been behaving more like backstreet market traders than the trustworthy consumer champions they make themselves out to be in adverts on TV.

"Some comparison sites have used misleading language to dupe consumers into opting for default options that only display commission-earning deals. And others have previously gone so far as to conceal deals that do not earn them commission behind multiple drop-down web options.

"As an immediate and essential first step towards rebuilding confidence, the companies should compensate any consumers who have been encouraged to switch to tariffs that may not have been the cheapest or most appropriate for their needs.

"We have no objection to commission being paid by suppliers to price comparison websites as long as the arrangements are clearly disclosed."

Sites must show all tariffs available in the market

Ofgem launched a consultation on the code governing the sector in August, with the newly revised rules announced last month.

The regulator has banned sites from automatically showing a partial view of tariffs of only suppliers paying commission to it. Instead, they must show all those available in the market – unless customers actively choose to see a smaller number of tariffs.