Household bills: get switched on, not stitched up

Powered by the profusion of price-comparison websites, switching has become big business. Simply go online and you'll find a cheaper supplier for your gas and electricity, landline phone, broadband, credit cards and mortgage. And then you can move your custom.

But while these free sites have long been hailed as "consumer champions", cracks have appeared.

Comparison services offer information and advice, helping people shop around to find the best deal, at their own speed and convenience. But their motives are not entirely selfless, as they stand to pocket up to £40 in commission each time a consumer switches supplier.

This has prompted concerns in the industry that several sites have been recommending the firms that pay the highest commission.

To police this lucrative market and protect consumer interests, Energywatch, the energy watchdog, recently introduced a voluntary "code of confidence". The aim is to ensure that consumers are given impartial and reliable information.

All websites must now be transparent. They must list all licensed suppliers and tariffs without bias, and prominently display the names of companies that pay commission.

The sites must use like-for-like comparisons when displaying charges from different providers, and show payment methods and information on "green" tariffs. They also have to show details of price rises recently announced by suppliers, and have an effective complaints procedure in place.

To underpin the reform, the regulator will this week unveil a list of those companies to which it has awarded "accreditation status" - in effect, a badge of good switching practice.

"For more than a year, Energywatch has conducted in-depth research and testing of the online comparison services to assure consumers they are receiving clear and unbiased information," says Energywatch spokesman Graham Kerr. "Twelve sites have submitted themselves to an audit process so they can use the Confidence logo."

These include energyhelpline.com, unravelit. com, simplyswitch.com, uswitch.com and which.co. uk/switch.

Earlier this month, Energywatch told the sites whether their services met the new code's demands, and made recommendations on the changes needed to become compliant. They were given until last Friday to implement those changes.

Sites failing to make the grade will be refused accreditation - and, no doubt, lose a degree of consumer trust - while those that pass will then have to comply with an annual audit.

"There is more than one way to skin a cat, and more than one way to present information," says Mr Kerr. "We want to bring consistency into the comparison market."

The Confidence logo, he adds, will show the websites are independent, unbiased and open about how they are funded. "Seeing the logo should give consumers confidence that the services are accurate, consistent and competitive."

Once the code is introduced, adds Mr Kerr, you should, in theory, see similar results whenever you input your details into any of the accredited websites. "We will continue to work with the sites until their calculators provide customers with consistent and up-to-date information," he says. "But there are many factors that need to be considered."

For example, the way in which tariff information is presented differs between websites: some use two decimal points and others use three, and details are often updated at different times. "It would be terrific if we could guarantee that if you were to compare two newly accredited sites, then identical results would appear on both. But the reality is it will take some time to achieve this goal."

Overall, though, the initiative has been welcomed by consumer bodies.

"In the past, people have not always been offered the genuine 'best buy' deal because of the influence of commission on the recommendations made," says Janice Allen from the National Consumer Council. "The new code should offer more security and guarantees for consumers as they will see the full market; companies can no longer be excluded by virtue of not offering enough commission."

Switching sites applying for accreditation are confident they will pass muster.

After being contacted by Energywatch early last week, SimplySwitch has made changes to its calculator to meet the watchdog's rules. It has also had to make a slight amendment to the way it displays one-off discounts. "In the past, certain companies have operated on the basis of 'commercial advantage'," says Alistair Tillen, spokesman for SimplySwitch. "But now consumers will be better protected as there will be a level playing field."

Paul Green, chief executive of the comparison website energyhelpline. com, says the new code is a big improvement on the previous one. "You will now be able to compare like-for-like. We have invested in technology to host additional pages of information, such as when prices were last increased."

If you have never switched before, you could make big savings by changing your energy supplier. The process costs you nothing and, says SimplySwitch, your bills could fall by more than £100 a year.

Around 10 million domestic customers have never changed their supplier - and are paying £1bn too much for their gas and electricity, says Energywatch. The watchdog adds that switches are becoming more and more straight- forward, and that complaints about problems with transfers have fallen.

If you should encounter difficulties, however, approach the supplier to see if it can rectify the problem. If not, contact the regulator at www.energywatch.org.uk.

It is also worth noting that, last week, telecoms watchdog Ofcom announced it was launching its own accreditation scheme for price-comparison sites - designed to help consumers find the best deals for internet, telephone and digital TV services.