Price Comparison Sites: 'Don't Count On Them'

Written By Unknown on Selasa, 21 Oktober 2014 | 11.46

By Dharshini David, Business Presenter

If you don't want your entire budget to go up in flames as energy bills soar, the key, we're told, is to shop around.

And those comparison websites can, they claim, find you a far cheaper deal.

But are they guilty, too, of leaving us in the dark when it comes to their commercial arrangements? For while they might save you money, they aren't charities but businesses, set up to make money.

Of course, there's nothing wrong with that - after all even those cuddly meerkats need to eat. But could the thirst for profits - last year the five biggest comparison websites made a total of £170m -  be detrimental to customers?

Earlier this year, we at Sky News reported on claims that the commission paid to such sites by energy providers (which is likely passed on to customers in bills) was excessive.

Video: Comparison Sites: The Best Deals?

One energy boss told us that he was charged about £60 per customer or about 5% of the average dual fuel bill. He reckoned that a centralised switched website, funded by the industry and run by, say, the regulator would cost a fraction of that - less than £10.

What about the regulator? There is an Ofgem Confidence Code for comparison sites. Under this, sites do not have to declare how much commission they earned but are meant to display an easily accessible list of  who their commercial partners are (although we found some don't) and display tariffs in a "fair and unbiased way".

But now it has been revealed that customers may not be shown perhaps cheaper tariffs on comparison sites from suppliers who weren't paying a commission. Of the sites criticised - uSwitch, MoneySuperMarket, GoCompare, Confused.com and ComparetheMarket - only the first two are signed up to Ofgem's code.

But even if they were signed up, is the code fit for purpose?

Ofgem says it is "proposing tougher new rules to the code to make commission arrangements clearer". Is it?

It tells me that it wants a list of those suppliers who are paying websites commission to be "within two clicks of the homepage", which is, in practice, barely different to the current set up. And no, they won't request sites to reveal how much commission they're paid as that could "damage competition between sites". So much for transparency and consumer choice.

What about the practice of websites filtering results to leave out those tariffs which don't pay commission?

Ofgem say: "We want the sites to be more transparent about their commission arrangements with suppliers and make sure that consumers understand the impact these have on the results they will see."

In other words, it's ok to give priority to the suppliers you're being paid by - as long as you tell customers you're doing that.

Not surprisingly, critics claim these changes don't go far enough, and ultimately, the code will still be voluntary.

So the message to those tempted to use comparison websites to shop around is this: they may well give you a better deal, just don't count on them to give you the best one.


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