Energy customers risk being “bamboozled” by a flood of new deals following the scrapping of Ofgem’s four tariff rule, challenger supplier First Utility has warned.
Customers could be faced with choosing between a whopping 1,364 energy deals in 2017 from 44 suppliers, the company has estimated based on previous averages. Five years ago, the average number of deals per supplier was 31, across 13 suppliers.
A cap on the number of tariffs that can be introduced by each energy supplier was introduced in December 2013. However, it has not been in force since June, when the Competition and Markets Authority (CMA) issued a comprehensive report on the UK’s energy market, and was formally dropped last week.
Although scrapping the limit was an attempt to make the sector more competitive, it instead “risks adding more confusion and complexity”, First Utility has said.
“The prospect of returning to the bad old days of confusion marketing, without any requirement to explain these tariffs in a way that makes sense to consumers, is hugely concerning,” said Ed Kamm, UK managing director at First Utility.
“Why should customers be expected to wade through more than a thousand baffling options? This makes it harder for consumers to find and compare the best deals.”