The report, issued by the Energy and Climate Change Committee, found that many price comparison websites employed deliberately misrepresentative language and selective search results. Rather than choosing the cheapest or most appropriate tariff, customers were led towards deals that earned the comparison site an undeclared commission fee.

Last month, as reported by Your Money, chief executives of the UK’s top five price comparison sites admitted under parliamentary scrutiny that they could earn around £30 in commission for every switch. Only Steve Weller of uSwitch conceded that his firm owed customers an apology and compensation; other representatives were silent on the issue. Nevertheless, most price comparison providers have since amended their sites to display the complete range of available deals on the market by default.

The report calls for stringent regulation of the price comparison industry. Key proposed reforms include;

making full disclosure of commission arrangements compulsory

• banning non-Ofgem accredited comparison sites from market participation
• introducing processes allowing customers who were misled by incomplete or misleading information to seek compensation

While generally welcoming of the report’s conclusion, Ofgem has not embraced the Committee’s proposals on commission arrangements, however. In written evidence submitted to the committee, the regulator stated that “’there is a risk that including this information may confuse consumers, or lead them to make a poor decision, for example selecting a more expensive tariff because the site receives less commission for it.”

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“Some energy price comparison sites have been behaving more like backstreet market traders than the trustworthy consumer champions they make themselves out to be in adverts on TV,” said Tim Yeo, the Committee chairman. “The current hands-off approach is clearly not working and the lack of contrition from some companies even when faced with proof that they misled customers has convinced us that some form of licensing of energy price comparison sites may be needed.”

“We have no objection to commission being paid by suppliers to price comparison websites – as long as the arrangements are clearly disclosed.”