13 April 2006 | Anusha Bradley
A code of practice to ensure buyers get a good deal has been criticised because consultants who sign up to it will not have to declare commission payments.
The Utilities Intermediaries Association (UIA) is drawing up the code following calls from Energywatch to increase transparency for buyers (News
, 2 February).
The consumer watchdog has complained that advice given to purchasers by some consultants is not independent and some fail to tell clients if they receive commission from suppliers. It called for a regulatory code for the industry, a move supported by CIPS and energy regulator Ofgem.
Paul Savage, business service manager at Energywatch, believes the code should have "the greatest degree of disclosure possible". But Rod Sinden, UIA operations director, said: "We do not believe commission amounts should be declared."
This omission would "render the code useless", according to Chris Lewis, an energy consultant who has championed total transparency.
"If a consultant is offering value for money, they should have no problem declaring commission. Only the ones overcharging will resist this."
He added: "If commissions are not declared then the client cannot check whether a consultant is just placing the business where it can maximise its commission. What happens if they will not tell how much, and the supplier will not tell either?"
But Sinden said consultants would not sign up to the code at all if commission details had to be declared.
A second industry group, the Utilities Consumer Council, also plans to establish a code of practice for energy consultants.
Bob Spears, chairman, said total transparency would be desirable, but he would be consulting with potential members and suppliers before reaching a decision.
Savage said that Energywatch plans to review all possible entries before deciding which code to back.