Watchdog’s plan to let switching sites ‘hide’ energy deals should be rejected, say MPs

gas meter

The CMA’s landmark two-year inquiry into the sector concluded that price comparison websites should no longer be obliged to show customers all tariffs in the market, and should be free to choose which deals they display, reports The Telegraph.

But MPs on the energy and climate change committee claim the changes could “undermine consumer trust and disadvantage smaller suppliers, harming competition”.

In a letter to Greg Clark, the new business and energy secretary, committee chairman Angus MacNeil urges him to reject the “retrograde step” of allowing sites to “conceal deals that do not earn them commission”.

Mr MacNeil said: “Price comparison websites must do what they say on the tin. Consumers expect price comparison sites to shine a light on the whole market, not keep them in the dark and push them into commission earning deals.”

Currently, most switching sites follow an industry code operated by Ofgem that requires them to give users a clear option of seeing all tariffs in the market.

The rules over how these options are presented were tightened just last year after concerns that some switching sites were misleading customers by pre-ticking options that would only display deals where the site could facilitate the switch in return for a commission.

But the CMA argues that price comparison sites should be free to choose which deals they display, because this will encourage competition between the sites and allow them to negotiate exclusive deals with suppliers.

It has said that the sites will have to make clear that they are not offering all deals, and pointed out that customers who want to see all tariffs can use the Citizens Advice website.

But small suppliers are battling against the proposed change because many of them currently do not pay commission and effectively enjoy free advertising via the sites.

GB Energy Supply and So Energy have both warned that the changes are likely to result in them having to pay commission, which can be £70 per household, and then pass this on to household in the form of higher prices.

A spokesman for the Business, Energy and Industrial Strategy department said: “The CMA has recommended that Price Comparison Websites should compete against each other to offer their customers competitively priced deals.

“Competition is key to delivering an effective energy market and driving down prices for bill payers. It’s important that industry work together to encourage consumers to switch supplier.”

In practice, it is understood the decision on the CMA’s recommendation will lie with Ofgem, which operates the code of confidence for switching sites.

The energy regulator is expected to issue a consultation on the proposed changes shortly but Dermot Nolan, its chief executive, has already urged the industry to accept the CMA’s plans.