BT, uSwitch clash over transparency of switching sites

uSwitch rejects 'murky money making methods' claims

BT has called on uSwitch to come clean about commission charges following concerns about the transparency of the online price comparison service.

uSwitch - which was snapped up by US outfit EW Scripps for £210m ($366m) earlier this month - describes itself as a "free, impartial...comparison and switching service that helps customers compare prices on a range of services including gas, electricity, home phone, broadband providers and personal finance products".

It claims to be able to save consumers money on their bills and generates its own revenue by a "small commission payment [from the gaining provider] when a customer chooses to switch or apply for a product through us".

But documents obtained by the Mirror suggest uSwitch was prepared to offer BT the chance to recruit more punters for a fee - something that is strenuously denied by uSwitch. Quoting from the letters, the Mirror reports that uSwitch wanted a £40,000 a month "advertising" fee to add BT and its logo to the uSwitch website. It also proposed a commission of £50 for each new punter it signs up to BT.

The story has prompted John Robertson MP, chairman of the all-party telecoms group, to contact regulator Ofcom about the allegations amid concerns that switching sites should be more open about the fees they charge.

"It is vital the advice given by switching companies is totally impartial," he told the paper. "It would be highly improper if the advice they give is determined by financial incentives."

Now BT has hit back at what it calls "a lack of full transparency" and is demanding changes be introduced to ensure that consumer confidence is not undermined.

BT Retail chief operating officer John Petter said consumers "may be surprised to know the huge commissions involved for the switching companies".

"There is obviously nothing wrong in competition and choice - both of which are great for consumers. But customers also clearly deserve open and transparent information about the levels of commission-based selling and the potential savings that can be made from switching. We would welcome the size of commissions being made public to a customer - just as they usually are when advice is given in the financial services sector."

"We would also welcome clarification from uSwitch on what information they use to underpin product comparisons. BT recently worked with a leading accountancy firm to examine what we know about uSwitch's data and we don't recognise the amounts of potential savings being claimed," he said.

But uSwitch has rejected the allegations claiming that the "context in which uSwitch has been cited is wholly inappropriate and there have been serious misrepresentations made in these articles".

A spokeswoman for uSwitch told us: "The allegations that form the basis of the articles in question, whereby uSwitch is accused of industry failings and 'murky money making methods' are completely unfounded. Consumers can be assured that our service is accurate and impartial. uSwitch is transparent about the fact that it has commercial relationships in place and is independent of all the companies it represents, these relationships are in place to help us maintain a free service and to make the switching process as convenient as possible for our customers."

A spokesman for Ofcom declined to comment on the story insisting it was a matter for BT and uSwitch. ®