The third party intermediaries (TPI) sector needs regulation but it needs to be “light” and shouldn’t stifle the market.
Graeme Forbes, Head of Markets at Gemserv said it is important to have “sufficient regulation to lose the malpractice but not over-regulation to the point where the market is constrained”.
Ofgem has set out the Confidence Code for energy price comparison websites (PCWs) and the Code of Conduct for TPIs to ensure companies are giving consumers the best deal and working in their interests.
Mr Forbes believes the drafting should “ensure there’s no dubiety over what it means”.
He told ELN: “There are some good elements to it but we would also say it’s only as good as the level of enforcement that goes with that.
“In any walk of life, in any industry, there will always be some who will try and push the envelope or blur the lines. I think it’s important the Confidence Code is robust and clear in how it is both written and interpreted, but it’s also important that there’s a degree of enforcement and support, so the participants realise the Confidence Code has meaning.”
Energy price comparison websites that “make the grade” can display Ofgem’s Confidence Code ‘badge’ which tells customers they can trust the site’s advice.
Those that have been accredited with the voluntary code are required to list which companies they have commission arrangements with and how much they earn on certain tariffs.
With a proportion of customers not having access to a computer and not tech-savvy, Mr Forbes said the industry would be “missing the trick” if it sees the internet as the only answer – and there must be other means of communication.
Paul Rocke, Energy Delivery Consultant at Gemserv added policy makers need to ensure they don’t stifle innovation.
He told ELN: “We don’t want a code that’s going to constrain the TPIs in the market but one that’s going to be a light touch of regulation and that will increase trust. It will increase assurance to customers that TPIs have an appropriate level of control over them.”
He said if a customer knows TPIs have signed up to an industry standard, it will be beneficial in gaining trust.
“It will also allow new entrants to have a lot more certainty on what the expected standards are and give them something to work towards rather than an unknown playing field”, Mr Rocke said.
Both the industry experts agreed PCWs and TPIs could play important roles in rebuilding trust in the sector.
Gemserv works at the heart of the UK’s energy, water, environment and telecoms sectors and provides a range of services to government departments, regulators, trade associations and market participants. For more information, please e-mail [email protected] or call 020 7090 1022.
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