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Co-operative Energy turns up heat on Government to create impartial comparison service for energy customers

Posted on 28 February 2014

Leading energy provider, Co-operative Energy, is calling for swift action from the Government  to set up an independent information and comparison service for energy customers after research* revealed  that a staggering 78 per cent of consumers stated that they would use an impartial service instead of a commission based comparison site.

Member-owned Co-operative Energy, which has over 200,000 customers, is calling for the Government to create a public serving, independent information and comparison service that is both impartial and doesn’t mislead the public. The only resource currently available for consumers to compare energy prices, beyond calling each of the energy providers individually, are the switching sites. The switching sites are misleading customers as they’re positioning themselves as a service when in reality they are profit maximising sales organisations, charging the energy companies a disproportionately high commission which they in turn pass on to customers through energy bills. 

The results showed that over three quarters (81 per cent) of consumers said that they think commission charges passed on via energy bills are unfair. Almost two thirds of consumers surveyed (60 per cent) stated that the fact comparison sites earn commission from energy suppliers will put them off using comparison sites in future. And many consumers confessed to being in the dark about how switching sites work with nearly half (48 per cent) unaware that they make their profits by charging the energy suppliers a commission per switching customer. 49 per cent think charging a commission is unethical.

The independent research commissioned by Co-operative Energy indicated that over a third (39 per cent) believe there should be no commission charge to pay to the comparison site during the switching process. 30 per cent thought an outlay of under £10 would be a reasonable payment.

Ramsay Dunning, group general manager of Co-operative Energy said:  “Our research findings show that consumers are not happy with the current situation and that many feel they are having the wool pulled over their eyes.  Establishing a properly regulated, Government-backed alternative to the switching sites represents a further step forward in creating greater transparency across the energy sector. For some time we have been campaigning for an impartial, not-for-profit regulated comparison service as customers are being misled into believing they are being provided with a service showing the best prices, when in reality the switching sites are only providing them with  products paying fat commissions. 

“We felt it only right to champion the need to create an independent information and comparison service, so the public can be confident of impartial trustworthy information to help choose the best deal available.” 

The creation of an official, impartial and free-to-use service will present consumers with all the available tariffs currently on the market and enough relevant supporting information to allow an informed decision to be made on which energy supplier to use, it will also serve to bring energy bills down. 

Mr Dunning believes the commercial comparison sites don’t always operate in the best interests of consumers:  “Customers have a right to be able to compare energy tariffs and what we have at present is a situation where some online comparison sites are not being transparent in their dealings and are deliberately directing customers only to commission generating tariffs. Comparison sites are misleading customers as they are pointing them towards the tariffs that pay commission rather than displaying the whole range available.  

“There is no questioning the convenience of comparison sites but this needs to be impartial and for the benefit of the public rather than designed to generate maximum profits for the site operators. We believe energy customers should be able to look forward to having the convenience of the comparison sites without fear of paying over the odds on their energy bills. Providing fair choice and competition for consumers is what is required and the sooner this becomes reality, the better.”

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