Energy Boss Attacks Price Comparison Websites
The boss of Co-operative Energy has accused price comparison websites of misleading customers and pushing up energy bills.
Group General Manager Ramsay Dunning has called on the likes of uSwitch, MoneySupermarket.com and Energy Helpline to disclose how much they charged in commission each time a business or household moves supplier.
Sky News Business Presenter Joel Hills said it was his understanding the rate of commission could be as much as £60 per account switched.
In a speech at a conference held by Cornwall Energy, Mr Dunning said that far from improving competition, price comparison websites were a negative influence.
He added: "It's time all the advertising costs and fat profits were returned to hard pressed households.
"There is a lot of money spent through the comparison websites - because they charge companies likes us and the Big Six and independents a rate of commission.
"If that rate was a lot lower, or non-existent, the bills to customers would be lower, because our costs would be lower."
Co-operative Energy uses price comparison websites and says it has gained 60,000 customers in the nine months through to the end of last year.
Mr Dunning refused to say how much his company paid the websites in commission, claiming the contracts were commercially confidential, but called for full disclosure.
According to the Department of Energy and Climate Change, almost five million gas and electricity accounts switched in the year through to the end of September 2013.
Ofgem, the regulator, said price comparison websites play an "important role" in the energy market, but admitted it does not know how much they charge in commission.
A spokesperson said: "Ofgem runs a code of practice for these sites and we are reviewing it to ensure that its objectives are in line with our reforms for a simpler, clearer, fairer energy market. We will be consulting on this in spring.
"The code of practice protects consumers in a number of ways. For example switching sites have to state which suppliers they earn commission from.
"They also have to make sure that they do not rank tariffs in accordance with which suppliers from which they are earning commission."
Adam Scorer, director of Consumer Futures, said price comparison websites are popular but there were issues of trust and transparency with their services.
He said: "Consumers should not automatically assume that a price comparison website will save them money on their purchase. In our research this was only true in 21% of cases.
"Without price comparison websites millions of people would be on higher tariffs than they are now."
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