TheBigDeal.com press release, 3 August 2016
"The CMA's two year investigation has done little to help consumers and may well do more harm than good."
Today Ofgem says it will go ahead with the CMA's recommendations for the energy market. They include:
- Capping the cost of bills for people on prepayment meters
- Keeping a database of customers for energy companies to contact about their deals
- Allowing price comparison sites to hide deals - even if they are the cheapest - if they don't get a kickback.
Responding, Will Hodson, co-founder of consumer collective TheBigDeal.com, said:
"The CMA's two year investigation has done little to help consumers and may well do more harm than good.
"Whilst it's good news that Ofgem are to cap prices for those on prepayment meters, for the vast majority of people, there will be no price protection.
"Instead, Ofgem will place British consumers on a database open for all energy suppliers to approach with deals. Such spam is both unwelcome and ineffective because the public don't trust energy companies anyway.
"The public's trust in comparison sites also looks set to crumble, as Ofgem will allow them to hide any deal that doesn't earn them a commission. These deals are often the cheapest on the market, so consumers will miss out on savings and competitive suppliers will be hidden from view. That can only hurt competition and benefit the Big Six - a bizarre outcome from a two year competition inquiry."
Notes for editors
Energy and Climate Change Committee Chair Angus MacNeil MP said: "Price comparison websites must do what they say on the tin. Consumers expect price comparison sites to shine a light on the whole market, not keep them in the dark and push them into commission earning deals." (21 July 2016).
Citizens Advice Bureau chief Executive Gillian Guy said: "Comparison sites shouldn't be pulling the wool over people's eyes. People need all of the information at their fingertips." (20 October 2014).
TheBigDeal.com research exposes price comparison sites' dodgy behaviour online and over the phone
On 20th October 2014, TheBigDeal.com published research that showed that the Big Five switching websites (Go Compare, Compare the Market, MoneySupermarket, uSwitch and Confused) all hide the cheapest deals from users because they don't get paid by energy companies for them. The full research including over 200 screenshots taken over 13 weeks can be found at: https://thebigdeal.com/blog/research-into-price-comparison-websites
On 2nd February 2015, TheBigDeal.com published similar research except into activity over the phone that found that all the Big Five switching websites (Go Compare, Compare the Market, MoneySupermarket, uSwitch and Confused) hid the cheapest deal when talking to customers. The full research including recordings of the phonecalls made can be found here: https://thebigdeal.com/blog/PCW-Miselling-Over-The-Phone
This research led to an official investigation into the behaviour of the Big Five price comparison websites by the Energy and Climate Change Select Committee. http://www.parliament.uk/business/committees/committees-a-z/commons-select/energy-and-climate-change-committee/inquiries/parliament-2010/energy-price-comparison-websites/
The energy regulator Ofgem also tightened up the rules around comparison sites following our investigation: http://www.bbc.co.uk/news/business-30912626
Polling shows that the public don't want a return to deal hiding
- Polling from Populus shows that the public do not trust price comparison websites and want such sites to show every deal available on the market:
- 79% think energy switching sites should automatically ensure every user sees the lowest priced tariff whether the site receives a commission or not. Just 7% disagree.
- Half of people (47%) don't trust switching sites. Just 3% think they are very trustworthy.
TheBigDeal.com is a consumer collective focused on reducing people's energy bills. We bring together tens of thousands of consumers and use our collective buying power to create exclusive deals.
Launched in March 2014, we now have over 200,000 members and continue to grow. 62% of our members have never or hardly ever switched before - these are the very people who have been let down by the energy market for too long. Moreover, 60% of our members are over the age of 55 and 30% over the age of 65. We have saved the British public over £10 million since we launched.
TheBigDeal.com is a start up business and charges a commission to energy companies. We are 100% transparent and publish the exact amount of our commission. For our latest switch that was £40 for a dual fuel (both gas and electricity) switch. This compares to as much as £80 to £100 for the Big Five price comparison websites who refuse to publish their exact commission.