Ofgem requires suppliers to improve help for customers in payment difficulties, following review
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Energy regulator Ofgem has today published its Market Compliance
Review of how energy suppliers help customers in payment
difficulties and has found issues ranging from minor through to
severe weaknesses, or failings. The deep dive found that,
although good practice exists across the industry, with one
supplier having no issues, most need to make improvements in
processes and governance to meet their obligations. The majority of
suppliers were found to have minor...Request free trial
Energy regulator Ofgem has today published its Market Compliance Review of how energy suppliers help customers in payment difficulties and has found issues ranging from minor through to severe weaknesses, or failings. The deep dive found that, although good practice exists across the industry, with one supplier having no issues, most need to make improvements in processes and governance to meet their obligations. The majority of suppliers were found to have minor or moderate issues and three were found to have ‘severe’ weaknesses – of which two suppliers have been served with immediate enforcement notices. Given the seriousness of these concerns, Ofgem has already issued Provisional Orders to Utilita and ScottishPower, requiring specific and urgent actions, and the regulator will also consider whether enforcement action is warranted for other suppliers. Key findings:
Amongst the findings were companies with non-existent policy relating to customers in payment difficulties, a lack of management oversight in the quality of their customer engagement and a lack of adequate training materials. Energy suppliers have been facing demands of their own over the past year; however, prioritising vulnerable customers struggling to pay their bills during this winter is critical. Jonathan Brearley, Ofgem CEO, said: “This winter will be challenging, especially for those struggling to pay their energy bills. Although the government’s package of support will provide some welcome relief, it's critical that, going into this tough winter, energy companies prioritise the needs of vulnerable customers struggling to pay their bills. “We have reviewed suppliers on how they help customers who are having trouble paying their bills, particularly those who are vulnerable, and found some suppliers have fallen short of the standards Ofgem expects. We accept that there are many pressures on energy companies in the market this winter, but the needs of vulnerable customers must be part of their top priorities. We will now work with companies on where they can improve, and I all urge all suppliers to step up to the challenge." In the deep dive across suppliers, although lots of good practice was found, Ofgem found evidence in places that there was a lack of:
As well as publishing the outcome of the review today, Ofgem has also sent a letter to all suppliers outlining the standards expected of them – as well as best practice information. The next market review will look at customer vulnerability and will be published later this year. ENDS Contact Information
Ofgem Media Team Notes to editors NOTES TO EDITORS There is no requirement for customers to contact their suppliers about this, as all issues will now be addressed. This review, designed to help customers struggling with bills, is the second deep dive of supplier behaviour by Ofgem, in a series of market reviews looking to improve sector practice and customer service. The first review examined supplier behaviour with regard to direct debits, and found failings in 12 suppliers, one of whom (TruEnergy) was served an enforcement order. Since that review, significant improvements have been made and led to TruEnergy being obliged to commission an independent audit to assess whether its direct debit policies and processes are compliant with its regulatory requirements. This current review has now identified areas for improvement across suppliers. This includes:
Ofgem has launched a series of market compliance reviews (MCRs) aimed at energy suppliers - Market Compliance Assessments - Update on next steps and further annual assessments in 2022 | Ofgem. They were launched via a letter from Retail Director Neil Lawrence to industry Ofgem has published a letter outlining expectations on suppliers including the key support they should have in place to help household customers struggling to pay their bills this winter. This includes good practices that could be adopted to ensure customers get the best possible support. The Market Compliance Review for customers in payment difficulty assessment divided suppliers into four groups according to service levels, and those who fail to act as a result of the MCR face the possibility of enforcement action and significant fines. This Market Compliance Review only relates to domestic customers, as non-domestic customers are currently subject to different regulations regarding debt recovery and would require a completely different methodology. The first Market Compliance Review examined supplier behaviour with regard to direct debits PRESS RELEASE: Ofgem requires improvements from energy suppliers on customer direct debits | Ofgem See also for background: Consumer Perceptions of the Energy Market Q1 2022 Report https://www.ofgem.gov.uk/publications/consumer-perceptions-energy-market-q1-2022
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