The regulator has revised the Confidence Code for price comparison sites.
Ofgem has launched a new Confidence Code for energy comparison websites.
The revised Code will require accredited sites to meet stricter standards when displaying gas and electricity tariff information.
Ofgem's new “gold standard” will require comparison websites to:
- Show all tariffs available in the market unless a shopper actively chooses to see a smaller selection.
- Use clear and simple language to communicate choices to shoppers. The wording must be approved by Ofgem.
- Make any commission arrangements on tariffs or with suppliers transparent.
The previous version of the Code permitted comparison sites to take users to a partial view of tariffs from suppliers paying a commission to be there.
The importance of the Code
Energy price comparison websites are currently the most popular way to shop around for gas and electricity.
Ofgem says around 40% of energy shoppers used a comparison site to compare deals at their last switch.
Ofgem Confidence Code accreditation will be a signal to energy shoppers that the comparison site they are using offers a whole-of-market view covering all payment methods, is impartial and meets higher standards of accuracy and reliability when displaying tariff information.
The Code also requires a comparison site to have an effective complaints procedure, a link to energy efficiency information and information on Government grant schemes users may be eligible for.
When will the new Code apply?
The new Confidence Code will come into force at the end of March 2015.
Energy price comparison sites that want to keep their accreditation and continue using the Confidence Code logo must make any necessary changes by this time.
Rachel Fletcher, Ofgem senior partner, said: “Comparison sites are a great place to start energy shopping, but customers need to feel confident that the sites are providing information they can trust. From the end of March, Confidence Code accredited sites will need to be more transparent with their users and I’d encourage them to meet these new standards earlier.”
The lovemoney.com energy comparison centre is fully accredited by the Ofgem Confidence Code and includes a whole of market view of energy tariffs.
Future work
Ofgem says it will examine how to expand the Code to include sites that do not manage their own database, how to facilitate face-to-face sales and broadening the Code to cover collective switching service providers.
The Competition and Markets Authority (CMA) is currently investigating the retail energy market and this may also focus on the role of third party intermediaries, which includes comparison sites.
Ofgem says it will consider the CMA's findings as part of any future work and keep the requirements of the Code under review.
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