Energy suppliers are failing to explain to customers how to accurately compare tariffs, leaving them potentially unable to choose the best deal, a watchdog has warned.
Which? carried out a mystery shopping exercise by calling 13 suppliers six times each, asking them to explain the Tariff Comparison Rate (TCR), regulator Ofgem's new price comparison tool for consumers.
The TCR is similar to an APR (annual percentage rate) for credit cards and tells customers how much a tariff costs per kilowatt hour based on medium usage, and is intended as a guide to help compare deals.
However tariffs with the low TCR are not always the cheapest deal, which is why it is important that suppliers can clearly explain how it works to customers.
Which? said it received precise information during just four of the calls (5%), with only E.On and npower giving an accurate description of the TCR - but then only in two of the six calls they both received.
Previous Which? research found just three in 10 consumers (28%) got the right answer when asked to identify the cheapest deal from a range of tariffs using the TCR.
The watchdog found that when the tariffs were presented in a style similar to a petrol forecourt display, a format it champions, the number of people selecting the cheapest deal increased to 84%.
Which? executive director Richard Lloyd said: "If the energy companies can't even explain how to accurately compare tariffs then their customers stand no chance.
"It is clear suppliers need to up their game and ensure they can provide consumers with a clear and accurate explanation to help them find the best deal.
"Energy pricing is still far too complicated, which is why we want the Government to introduce simpler pricing, similar to petrol pump displays, so people can spot the cheapest deal at a glance."
An Ofgem spokesman said: "Ofgem has already told suppliers that they must improve their customer service, so they have to make sure that their staff can properly explain the tariff comparison rate to their customers.
"The tariff comparison rate is part of a range of reforms we have brought in to make the market simpler, clearer and fairer.
"All suppliers are required to provide explanations of the rates on their websites. And all suppliers must also provide tariff comparison rates on all communications which are regularly sent to customers, such as bills and annual statements. We are monitoring compliance with these reforms closely.
"The tariff comparison rate provides for a quick at-a-glance view of prices across the market. If consumers want a personalised estimate based on their own consumption suppliers must also provide this."