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NMa: ‘Energy consumers can safely use price comparison websites when switching energy providers’

In a study into price comparison websites, carried out by the Netherlands Competition Authority (NMa), such websites received satisfactory to good marks. Price comparison sites are useful tools for consumers that want to switch energy providers or energy contracts. They are independent, and offer consumers great deals. Jaap de Keijzer, member of the Board of the NMa, explains: ‘This is a wonderful result. After all, consumers should be able to make informed decisions about their energy providers, based on correct and clear information that is easy to compare as well.’

In its study, the NMa also included other websites that offer price comparisons, as well as customer-recruitment websites. Other websites and customer-recruitment ones scored significantly lower marks than the ‘real’ price-comparison websites. One of the reasons is that those other websites have connections with a restricted number of providers only. In the case of customer-recruitment websites, choices are more limited, and potential cost savings are fewer. Mr. De Keijzer adds: ‘We feel that these websites should include a statement or disclaimer of some sort about this, and that they should stop pretending to be objective and neutral price-comparison websites, because they are not, and that puts these websites’ visitors on the wrong track.’ The Dutch Consumer Authority will be keeping a close watch on websites that falsely present themselves as independent, and will take enforcement actions, if necessary, in order to prevent deception. A list of bona fide price-comparison websites can be found on the website of Dutch consumer information portal ConsuWijzer: www.consuwijzer.nl.

There is still room for improvement in the way energy providers communicate with their customers, both existing and potential ones, the NMa study further revealed. Three out of four mystery shoppers in the study did not recognize the deal they were promised in the actual contract they received. For example, the advertised deal and the contract use different names for the different tariff components. Furthermore, contracts sometimes hardly contain any information, or they contain too much information by listing tariffs that do not apply to that particular customer. Mystery shoppers were thus getting the impression that they were not getting the product they selected with the price comparison tool. ‘This is an excellent opportunity for energy providers to make improvements in this area,’ says Mr. De Keijzer.

Consumers often do not realize that the annual costs are merely an estimate of the actual costs, and that they only serve as a comparison tool. By definition, actual energy bills of consumers deviate from the estimated annual costs in the advertised deal. The NMa therefore argues that websites replace terms such as ‘costs per year’ or ‘estimated annual costs’ with clearer terms, indicating that the figures presented on the websites are estimates only. The NMa has called on energy providers and the price comparison websites to solve the issues it identified in the study. Responsibility for clearly communicating the conditions of energy deals and for having clear contracts lies primarily with the energy providers, not so much with the price comparison websites, according to the NMa. The study’s results include a list of energy providers and price-comparison websites that have come up with concrete and reasonable plans for improvement, or that have already implemented such plans.

More and more consumers use price comparison websites to get more information about the energy market. The NMa believes it is critical that these websites offer reliable and correct information. That is why, between October 2010 and March 2011, the NMa carried out a study, for the second time, using mystery shoppers, into the quality of websites that compare the tariffs and conditions of energy providers. This is a follow-up to the study the NMa and the Dutch Consumer Authority carried out in early 2010.

The NMa evaluated the quality of the price comparison websites using five criteria: provision of information, correctness, independence, choice, and sustainability. If a website scores positively on all five criteria, it can be considered reliable and transparent. All of the evaluated websites, as well as the complete report (in Dutch) can be found on www.consuwijzer.nl.