Some energy customers in the UK are paying up to £70 a year more by using auto-switching services, according to Citizens Advice.
Auto-switching services, such as Switchcraft and WeFlip, first appeared in the UK in 2016. They automatically switch their customers to better energy tariffs, with some charging a small fee and others earning commission from suppliers.
Research from the charity found that many auto-switching services don’t compare the whole energy market for their customers although they claim to. Some auto-switchers were found to compare less than 15 around 70 energy suppliers currently operating in the UK.
Citizens Advice said that consumers could save up to £70 if they use energy comparison websites to find a better deal themselves. And according to a recent survey by the consumer group Which?, 87% of price comparison website customers found switching energy easy, compared to just 69% of consumers who used an auto-switching service.
“The lack of regulation leaves people facing potentially serious problems and a lengthy and difficult path to resolving them,” said Gillian Guy, chief executive of Citizens Advice. “As more people use these sorts of services, it’s essential that better safeguards for customers are put in place now.
“The government has an opportunity in the upcoming energy white paper to fix the current problems and make sure the right consumer protections are in place as the UK moves to a zero-carbon future.”
Ed Dodman, director of regulatory affairs at the Energy Ombudsman, said: “This is a timely piece of research from Citizens Advice that shines a light on the problems that some energy consumers experience when using unregulated third-party intermediaries.
“As the ombudsman we think all consumers should be able to use our service if they have an unresolved complaint, no matter how they choose their energy deal and supplier. We are keen to work closely with the sector to find a way forward that ensures there is better protection for consumers and microbusinesses who use auto-switching services.”
A spokesperson for the Department for Business, Energy and Industrial Strategy said: “We recognise the positive role auto-switching services can play in helping consumers find better energy deals.
“However, there is a risk that the services they offer are not always clear, which is why we are exploring whether new powers are needed to protect consumers and ensure they have access to all deals.”
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