Five questions on: Comparison websites

 

Simon Read
Friday 05 June 2015 20:34
Comments

This sounds juicy. Have comparison sites been caught cheating?

No evidence of any wrongdoing has been published yet.

However, two major price-comparison sites faced accusations of price-fixing from the energy regulator Ofgem this week. MoneySupermarket and uSwitch both admitted that they have been asked to provide information to Ofgem for its investigation into whether there has been information sharing about the commission rates charged to energy suppliers.

Information sharing?

That’s a polite way of saying pricefixing. Will Hodson, co-founder of consumer collective the Big Deal, who has been highly critical of comparison websites, said: “Commissions are a cost that end up on our bills. If comparison sites have been colluding to fix those commissions at a high level, that is a scandal.”

Is it really a scandal?

If the websites have been pricefixing, then that would be a scandal. They portray themselves as the consumers’ friends, but if they have been misleading us to bolster their own profits, then that is wrong. The sites have been hugely important in helping millions of families to save money by switching suppliers, but they are still businesses needing to make profits from us, which is worth remembering. Laith Khalaf, of Hargreaves Lansdown, said: “Pricecomparison websites have been instrumental in helping consumers to shop around for the best deal, but any investigation is likely to rock public trust in these services.

What will happen next?

Ofgem’s investigation could take many months, leaving a shadow hanging over comparison sites until they are

given a clean bill of health, or fined for breaking competition rules.

What should comparison sites do?

“They should now publish their commissions as a matter of urgency,” reckons Will Hodson.

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