Ofgem tightens up rules for comparison websites

http://www.theguardian.com/money/2015/jan/21/ofgem-rules-comparison-websites

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The energy regulator Ofgem has announced new rules for comparison websites which will force them to give consumers more information on the tariffs they show, amid allegations that they are hiding the best deals from consumers.

In October 2014, collective switching site The Big Deal alleged that other comparison sites were hoodwinking consumers into deals where the site earns a kickback, rather than switching households on to the best tariff.

Ofgem has now ordered the sites to show all tariffs available, rather than defaulting customers into a partial view of tariffs using pre-selected buttons that take them into “deals where you can switch now”. These are the deals from which the site tends to earn the most commission.

The regulator also told the comparison sites to end confusing language, and make commission arrangements transparent. “Sites must explain clearly that they earn commission on tariffs that customers can switch to directly through the site,” Ofgem said.

The Ofgem announcements come at a time when the sector is in focus after three of the big six household suppliers – E.ON, British Gas and Scottish Power – said they are cutting tariffs following falls in wholesale energy prices.

The regulator also announced an investigation into energy firm SSE over concerns that it restricted competition in the electricity connections market.

The regulator has launched a probe into the way in which housing developments and other sites not yet connected to the grid choose where they get their power from, which can include a local distribution company or an alternative provider.

Ofgem said it wanted to increase competition in this market but had found evidence that SSE possibly breached competition law.

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