SSE and British Gas free to exploit white-label loophole in Ofgem rules

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Two of the UK's 'Big Six' energy suppliers will be able to avoid new rules brought in by Ofgem by exploiting a loophole in the regulations.

The energy regulator has brought in a number of new rules to the industry from January 1, 2014, however under one of the measures set to be brought in in April 2014, both British Gas and SSE will be able to avoid informing customers of cheaper deals on their 'white-label' brands as its Retail Marketing Review currently does not factor in such brands.

A white label brand or service in this instance refers to an energy supplier providing services for other energy suppliers. In this instance British Gas have partnered to provide Sainsbury's energy supply and SSE with M&S to provide their Sainsbury's Energy and M&S energy respectively.

Unfortunately for the energy consumer, these white label brands are under no obligation to match British Gas and SSE's tariffs, and similarly the two  'Big Six' firms are under no obligation to inform customers about the cheapest deals provided by the white labels.

An Ofgem spokesman said the energy regulator would to investigate more into white-label protocols before the end of the month.

He said: "In the interim, we have granted an exemption from certain RMR rules until 31 December 2014 for white-label providers that were in existence on or before 1 March 2013."

The energy regulator has already brought in new rules which have forced energy suppliers to list only four tariffs in order to simply the market for energy consumers.

Later in the year, it will bring in regulations forcing energy suppliers to provide customers with information on their cheapest tariffs. White-label brands will be exempt from both of these legislation changes however, until Ofgem decides how to tackle the issue.

An SSE spokesperson added: "Suppliers are required to tell customers about their own cheapest tariff in written communications like bills, annual statements and letters.

"This does not currently extend to white-label brands, although Ofgem is considering implementing changes at the end of 2014."

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