Auto-switch energy customers ‘not always getting best deal’

Some energy customers using automatic switching services could be paying up to £70 a year more than if they had found a good deal and moved themselves, according to Citizens Advice.

Auto-switchers manage the switching process for consumers. Some charge customers a fee, while others earn commission from suppliers.

But Citizens Advice said services do not necessarily compare all companies in the market and those that collect commission from suppliers may only compare the companies that pay them.

It found some are comparing fewer than 15 out of around 70 possible energy suppliers.

The charity estimated this could lead to customers spending up to £70 more than if they had searched themselves.

The charity wants to see more regulation of third-party services such as auto-switching services and comparison websites, arguing that if people buy insurance through comparison websites and something goes wrong, they have more protections than they would if they were buying an energy deal.

Last year, 6.9 million people used a third-party service to compare or switch their energy supplier.

Dame Gillian Guy, chief executive of Citizens Advice, said: “As more and more people use these sorts of services it’s essential that better safeguards for customers are put in place now.”

Ed Dodman, director of regulatory affairs at the Energy Ombudsman, said: “This is a timely piece of research from Citizens Advice that shines a light on the problems that some energy consumers experience when using unregulated third-party intermediaries.

“As the ombudsman we think all consumers should be able to use our service if they have an unresolved complaint, no matter how they choose their energy deal and supplier.

“We are keen to work closely with the sector to find a way forward that ensures there is better protection for consumers and microbusinesses who use auto-switching services, price comparison websites, energy brokers and other third parties.”

A Department for Business, Energy and Industrial Strategy spokeswoman said: “We recognise the positive role autoswitching services can play in helping consumers find better energy deals.

“However, there is a risk that the services they offer are not always clear, which is why we are exploring whether new powers are needed to protect consumers and ensure they have access to all deals.”

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