Consumer Charity Calls for Ofgem to regulate automatic energy switching

Energy auto-switching services have been around for a few years and are designed to make the process of switching energy supplier as quick and easy as possible.

In short, they check the market for you and switch you to the gas and electricity tariffs that they deem to be the best.

They then keep doing it as better ones are detected, meaning that a customer never has to personally get involved in the process and so that they can avoid any tariff opt out charges.

Many of these services are owned by price comparison websites which means that not all energy suppliers and their tariffs may be represented if they don’t pay the comparison site a commission.

If there’s a cheaper deal with a supplier that isn’t in partnership with the comparison site, then the auto switching service is unlikely to have it listed.

Some services, however, use a different model to generate income such as charging users a set yearly fee or monthly charge.

According to investigations by consumer groups, a result of this setup is that they don’t necessarily provide the best options which can lead to consumers missing out on as much as £70 a year in savings.

According to data, just 2% of consumers use such services but with Ofgem and consumer groups encouraging customers to switch and seek out the best energy deals, we can expect to see such services growing in popularity.

Because of this Citizens Advice has called for energy watchdog Ofgem to be given the power to regulate energy switching in the same way as the Financial Conduct Authority (FCA) does in financial services.

This could mean websites have stricter transparency rules, be ordered to protect the vulnerable and aggrieved customers could complain to the Energy Ombudsman.

“The lack of regulation leaves people facing potentially serious problems and a lengthy and difficult path to resolving them. As more people use these sorts of services, it’s essential that better safeguards for customers are put in place now. The government has an opportunity in the upcoming energy white paper to fix current problems and make sure the right consumer protections are in place as the UK moves to a zero-carbon future.” Said Gillian Guy, chief executive of Citizens Advice

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