Ofgem ordered to enforce fair deal

Dec 20, 2012

MPs insist the energy regulator must take stronger action to ensure customers get a fair deal

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Energy regulator Ofgem has been told to take a tougher line to ensure customers get a fair deal. The ‘Big Six' energy suppliers are accused by a committee of MPs of exploiting customer inertia to overcharge while offering cheaper deals to new customers, the BBC reports.

"We find it unsatisfactory that Ofgem should be so hesitant about launching preliminary investigations into potentially anti-competitive behaviour," said the report of the Energy and Climate Change Committee. "We understand that Ofgem plans to reduce barriers to competition... but we believe that a more proactive approach should be adopted."

Both Ofgem and Prime Minister David Cameron have told suppliers to simplify tariffs and the committee questioned why the regulator had been so slow to launch a full investigation. Consumer groups have alleged that suppliers are using "confusion marketing" to bamboozle customers.

The Energy Committee said that offering "loss leader" deals to attract new customers was stifling competition and keeping new players out of the market but the companies maintain that tariff simplification will not lead to better deals for customers.

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