Gas and electricity tariffs too confusing for consumers

April 11, 2007 5:00 PM

A study being presented to the Royal Economic Society conference this week concludes that switching gas and electricity suppliers often loses consumers money.

The study, by Chris Wilson of Oxford University and Catherine Waddams Price of UEA, found that, of consumers switching exclusively for price reasons, the vast majority (between 80% and 90%) fail to find their best deal, and between a fifth and a third of consumers choose new deals that are more expensive than their previous deals.

The researchers found no evidence that consumers were unfairly pressured. The problem is that consumers appear unable to work out accurately the effects of their choice.

Commenting on this research, David Howarth, Liberal Democrat spokesperson on Energy, said:

"Gas and electricity companies are taking advantage of their customers' inability to understand complex tariffs.

"The industry regulator needs to step in to ensure that consumers are given clear information and that suppliers do not engage in confusing price tariffs.

David Howarth MP

David Howarth

"Households already struggling with increasing levels of domestic debt and rising mortgage payments should not have to deal with the extra headache of trying to understand complex pricing systems.

"Ofgem has been too complacent about the confusing nature of energy bills in the past. This report shows that the market is failing consumers and it is time for the regulator to stop failing as well."

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