Price comparison sites and energy companies must improve their information provision to consumers

Special offers on energy contracts can often be so complicated to the average consumer, that energy price comparison sites can be a helpful tool in helping them make the right choice. What is more, these kinds of sites usually have the best offers and deals on energy contracts. However, it turns out that the information on these sites is not always complete nor easy to understand. And since these price comparison sites play such an important role, consumers should be able to completely rely on the information presented on these sites, the Netherlands Competition Authority (NMa) and the Dutch Consumer Authority argue in a joint study into the provision of information on 13 price comparison sites, which was released today. In order for them to be able to make a proper comparison and to present correct information on their sites about contract conditions, energy price comparison sites depend on energy companies for providing them with that information. That is why both these sites and the energy companies are jointly responsible for implementing the necessary improvements in the provision of information to consumers.

Making sure information is crystal-clear
The NMa and the Dutch Consumer Authority both agree that price comparison sites and energy companies must provide consumers with correct and complete information. Information must be crystal-clear. Yet, information on special deals and conditions in particular, however, is not up to par. For example, price comparison sites give an annual figure, which, in fact, is just an estimate, based on tariffs that are still subject to change. Price comparison sites should therefore better communicate these uncertainties. Consumers should be better informed of the factors that affect the amount on their energy bill.

It turns out that information is often either incomplete or unclear, which makes it harder for consumers to compare different energy products. The NMa has therefore voiced its concerns about this point in a letter directed to the energy companies, in which it also announced that it will be strictly overseeing compliance with the Guidelines on the Provision of Information.

In addition, consumer information website www.consuwijzer.nl contains the latest information, which should help consumers better understand how energy price comparison sites work. ConsuWijzer is a consumer information portal that is jointly operated by the NMa and the Dutch Consumer Authority.

The use of mystery customers
Part of the study involved 30 'mystery customers' each taking out five energy contracts using an energy price comparison site. About three out of four of these 'mystery shoppers' noticed a difference between the actual contract they received and the contract they thought they had taken out. One of the explanations is that the tariff information is presented in a different way on the price comparison site than in the contract. It should be noted, however, that there is a big difference between what 'mystery shoppers' perceive as incomplete and incorrect and information that is genuinely incomplete and incorrect.

It turns out that, in most of the cases, the way total costs are presented is correct objectively speaking. Genuine discrepancies, however, have been observed in about 20 per cent of the cases. The NMa and the Dutch Consumer Authority attach considerable value to the criterion of correctness, especially because special offers of energy companeis are so complicated. This study involving 'mystery shoppers' will therefore be repeated this fall.

Five criteria
In their study, the NMa and the Dutch Consumer Authority assessed thirteen price comparison sites on five criteria: correctness, independence, provision of information, completeness, and sustainability. The study looked into all of the sites where consumers can directly switch energy companies. The websites of the energy companies themselves have not been included in this study, since these are not independent by definition.

Most of the differences between the various price comparison sites involve the criteria of correctness, completeness, and sustainability. No big differences in quality could be found between the sites on the criteria independence and provision of information.

Results per site
Most of the price comparison sites scored adequately or well on most criteria. However, all of the price comparison sites still have room for improvement.