Comparison sites make £30 every time customers switch energy supplier

3rd February 2015

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Five of the biggest energy comparison websites admit that they earn up to £30 commission every time a customer uses their service to switch provider.

When customers change both electricity and gas accounts, they earn up to £60, according to the BBC.

Bosses of the comparison websites said the fees were justified as they were questioned by MPs of the Energy Select Committee.

The websites have been told by Ofgem that, by the end of March, they must end the practice of only displaying suppliers that pay them commission and leaving other options hidden unless the customer changes the default setting for the search.

Comparison sites often show the prices of commission-paying suppliers by asking if customers want to “switch today”, leaving out many of the cheaper tariffs.

John Robertson, a Labour member of the Committee, accused the comparison sites of not being fair to customers.

He said: “There seems to be some kind of ethos in the energy market that says, ‘I want to rip off every person I get hold of’.”

Moneysupermarket, which said it charged suppliers an average of £29, said: “The fees are required to fund the price comparison sites. We are not a simple computer programme.

“We have to spend money on technology, and we have to spend money on marketing.”

Steve Weller, the chief executive of Uswitch, initially said the amount it charged was secret.

But when pressed by MPs, he admitted that the average commission was also £30.

MPs also asked about the profits made by comparison sites.

Compare the Market  was the most profitable, making £69.7m a year, including earnings from other products such as insurance.

Phil Morgan, the chief operating officer of Go Compare, which makes a profit of £19.8m, said: “Every part of the profit we make is based on a customer saving money.

“The larger the profit, the more savings we’re putting into the market.”

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