Ofgem tightens confidence code

Comparison sites ‘must not hide commissions’

meerkatPrice comparison websites are being ordered to tell consumer which energy companies are paying them commission to display their tariffs.

Ofgem, the industry regulator, says consumers need to be confident that deals are not being hidden.

Comparison sites are currently the most popular way to shop around for gas and electricity – around 40% of energy shoppers used a comparison site to compare suppliers at their last switch.

But Ofgem wants to ensure there is full transparency and its Confidence Code aims to give customers assurance that accredited sites are independent of suppliers, carry every tariff available in the market and meet high standards of accuracy and reliability when showing tariff information.

Ofgem took on the Code from Consumer Focus in 2013 and has been examining whether it provides the right protections for energy customers. The previous version of the Code allowed sites to take users straight to a partial view of tariffs from suppliers paying commission to the site.

The watchdog says the changes will help customers make an informed choice when using a comparison site. The changes say:

·        Sites must show all tariffs available in the market unless customers actively choose to select to see a smaller number of tariffs.

·       The wording of any choice must be very clear to site users. Sites must test their messaging with consumers and be able to prove that it is clear and simple. If a site cannot demonstrate this, it will not be able to give customers a choice of view, and will have to show all tariffs. The wording of this choice must be approved by Ofgem.

·      Sites must explain clearly that they earn commission on tariffs that customers can switch to directly through the site.

The new Code goes live at the end of March and sites that want to retain their accreditation must satisfy the new rules by that time.

Ofgem will keep the Code under review, to make sure it continues to provide a high level of consumer protection without preventing accredited sites from coming up with innovative ways of marketing energy deals to customers and keeping pace with changes in the energy market.

Rachel Fletcher, Ofgem senior partner, said: “Our market reforms have made it easier for consumers to pick out better deals and switch suppliers. There has never been a better time to switch – consumers can make savings of around £200 by switching.

“Comparison sites are a great place to start energy shopping, but customers need to feel confident that the sites are providing information they can trust. From the end of March, Confidence Code accredited sites will need to be more transparent with their users and I’d encourage them to meet these new standards earlier.”

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