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Ofgem-run energy price comparison service?

ofgem-logoThe Competition and Markets Authority (CMA) published the preliminary findings in their report in July, with regard to the energy market and its issues.

Along with a proposal to set up a Safeguard Regulated Tariff which would protect all ‘disengaged’ customers from high standard variable tariffs, the CMA also suggested an Ofgem managed comparison service which would be completely impartial.

The idea was that an independent switching site might increase consumer engagement in the energy market and would be rolled out to domestic customers first and then potentially to microbusinesses.

Ofgem, it seems are embracing the idea as they stated that it “must be considered alongside the other remedies the CMA has set out”.

“There are alternative options that could also achieve the CMA’s objective of helping to facilitate widespread engagement by domestic consumers including through price comparison websites (PCWs),” Ofgem said, adding that the potential for consumer awareness campaigns may be an effective way of encouraging engagement.

After their less than successful year, having received much criticism for their supply market indicator (SMI) reports and confusing new bill layouts, Ofgem are no doubt rubbing their hands together at being given some kudos and the potential to gain back their reputation.

However, the idea hasn’t been welcomed by everyone. There’s growing concern from suppliers and consumers like that an Ofgem comparison service would cause havoc with the energy market and damage investor confidence.

Surely customers should have the right to choose their broker and their supplier? Whatever next, will the government start running independent car insurance comparison services or an impartial broadband broker?!

Of course not! While we agree wholeheartedly that consumers need to be educated on the energy market, how much they are paying and the potential savings they could make, the issue doesn’t lie with all TPIs or PCWs.

As with most services, there are honest providers and those that are not so transparent. To inspire trust in the energy market, we believe there should be rules put into place to ensure all PCWs show whole-of-market tariffs, rather than those sneakier brokers that hide the better deals to gain more contracts to fulfil specific supplier quotas.

Tariffs need to be set out clearly with all charges explained to make energy bills less confusing and complex. There should also be a customer service standard across the board for all brokers and suppliers to adhere to so consumers know what to expect.

The CMA investigation has been delayed until June 2016 now to allow for time to digest and consider the suppliers responses to the proposed remedies.

In the meantime, we can help with any advice needed on suppliers, switching and the energy market. Plus, for an impartial business energy quote, give Business Juice a call on 0800 051 5770, email us at quote@businessjuice.co.uk or use our contact form.

 

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