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Price comparison websites could be about to get more expensive

Hundreds of thousands of domestic and non-domestic energy buyers rely on price comparison websites to make informed decisions about their energy supply. But users of price comparison websites could soon struggle to find the best deals following a confusing recommendation by the Competition and Markets Authority (CMA). Price comparison websites like uSwitch, Money Supermarket and energy Helpline have, the past, been criticised because they do not immediately display all prices and often hide the best deals. Most comparison websites have a two-tier structure of prices. When you first input your details on a price comparison website, the first page of results you sill will be made up of tariffs that the price comparison website can help you switch to. Energy companies pay a commission to the price comparison websites in order to appear on this ‘facilitated switch’ page. And often this page does not include the very best deals (which are frequently offered by smaller energy companies). To see all the prices, users need to press a ‘whole market view’ option. A recent report by the Competition and Markets Authority on price comparison websites found that up to sixty percent of the top energy deals weren’t immediately available on some of the comparison sites. But, somewhat confusingly, the same report also recommended that the price comparison websites should not be required to show the ‘whole of market comparisons’ as they are currently. The CMA believes that by not forcing price comparison sites to show all the prices on offer they will increase competition in the sector and that will ultimately be better for customers. But it could make it harder for domestic and non-domestic energy customers to find the best deal. One consumer group warned that the CMA had “turned the clock back” by deciding that price comparison websites should no longer be obliged to show deals on which they didn’t earn a commission. The CMA pointed out that wannabe switchers could go to a new comparison website from Citizens Advice to compare all the tariffs on the market. But in Citizen's Advice's response to the CMA report it said that it believed the change "could have negative unintended consequences that outweigh its benefits" and would increase the "hassle factor in switching." They added: "We think the argument that this remedy would generate competition within the energy market is not as strong as the CMA suggests." A final report will be published in June.

The best alternative

Although many household energy buyers use price comparison websites, lots of small and medium sized businesses use them as well and so could face higher prices because of the CMA’s recommendation. Generally, price comparison websites aren’t as useful for business energy buyers as they are for domestic buyers. Business energy prices are determined by a larger range of factors compared with domestic prices. This means they need more bespoke quotes based on their full range of needs. Price comparison websites can only usually offer an indicative quote for business users. To get a full range of accurate quotes it is better to use a specialist business energy broker like Utility Helpline. An energy broker will contact suppliers directly and push hard to get the best deal for their business customers. Utility Helpline posts detailed tenders to 20 of the best business energy suppliers and ranks the returning tariffs based on price and other important factors. This lets you to make a more informed decision about your business energy supply. For more information about Utility Helpline’s range of services and how we can help you get the best deal on your energy, speak to a member of the team today. Call: 0800 043 0423.  

Published by Utility Helpline on (modified )