Customer ratings among Ofgem plans for better service

Energy suppliers must prioritise enquiries from vulnerable customers who need help under new rules announced by Ofgem today. 

The requirements, which take effect from December, will require suppliers to contact customers if they miss two monthly or one quarterly payment, check to see if they are struggling with bills and, if so, offer support such as affordable payment plans or, if appropriate, repayment holidays. 

As a first step, suppliers will also need to publish the Citizens’ Advice ratings of their customer service so the public can see how they compare on issues such as call wait times and quality of responses. Ofgem will also begin work with the sector to develop new measures of customer service with a view to publishing next year. 

In a speech to the Energy UK conference today, Ofgem’s CEO Jonathan Brearley will welcome the progress made since last year but will challenge the whole sector to meet the high standards set by some suppliers who were leading the way. 

He also warned suppliers that where they are falling short on customer service standards, Ofgem would not hesitate to take action, pointing to recent examples of firms making multi-million-pound payments for poor customer service such as unacceptably long call waiting times and call drop-off rates. Since that action was taken, we have seen improvements in call waiting times across the industry.   

The new standards – developed following a statutory consultation this summer – aim to make it easier for customers to contact their suppliers, ensure households who are struggling with bills are supported and improve overall customer satisfaction.

The introduction of the new rules into supplier license conditions means it will be easier for Ofgem to take action where there is evidence of suppliers failing to meet these requirements.   

Specific requirements include:  

• Be available via different contact methods and at times that meet customer needs. 
• Prioritise vulnerable customers or those calling on their behalf and offer free contact methods for people struggling to pay their bills.   
• Offer debt repayment plans at the earliest opportunity and consider offering temporary debt repayment holidays, where appropriate.
• Make it easier for consumers to see how good suppliers’ customer service is by making suppliers publish information on their Citizens Advice star rating in a prominent location and format that can be easily accessed by all its customers.

Jonathan Brearley, Chief Executive Officer of Ofgem, said:  

“With recent global events increasing pressure on gas prices, it’s likely that bills will rise further. 

“This is why the industry needs to do all it can to ensure good customer services and provide help with managing debt, especially for the most vulnerable.

“In the last year, we have seen some good examples of suppliers stepping up their support for customers. However, despite this, the feeling of those on the frontline working with vulnerable households is that more still needs to be done.  

“Long wait times to speak to someone on the phone. Letters not replied to. Lack of empathy for people’s personal circumstances. This needs to change and today we are setting out our expectations of suppliers this Winter, and how they will be held to account to ensure consumers can get hold of them more easily. 

“In particular for vulnerable customers, we expect more proactivity and a more sympathetic response.”    

In preparation for this winter, Ofgem is working with industry and consumer groups to ensure consumers in debt are protected and get the support they need. Ofgem has convened stakeholders to encourage the sector to raise standards this winter and welcomed Energy UK’s Winter Voluntary Debt Commitment and campaign to ensure customers reach out to their supplier if they are struggling with bills. These demonstrate good example of suppliers prioritising customer support and we want to see more innovative ways.  

Ofgem is committed to exploring the development of a new measure of customer experience that will ensure suppliers continuously drive improvements in overall customer service. Over the next year the regulator will engage with suppliers, Citizens Advice and other stakeholders to begin this process. 

Reputational incentives, alongside a competitive market can encourage suppliers to consistently provide better outcomes for consumers.  

The regulator recognises the progress already made by suppliers since Ofgem’s Market Compliance Review into customer service standards in February raised severe or moderate weaknesses at 12 energy companies.  

Today’s decision, which will see the new rules in place from 14 December, requires further improvement and follows other measures taken by the regulator this year to enhance protection for consumers this winter. 

This includes: 

• An increase in winter storms compensation from £700 to £2000
• Levelisation plans to permanently end the prepayment meter (PPM) premium under the Price Cap, where prepayment customers are charged more than those who pay by direct debit to cover the additional costs and resources required by suppliers to provide energy via PPM. 
• Additional Support Credit increase: a new crisis credit allowance for PPM customers that are at risk of disconnecting because they can’t afford to top up. 
• Expanded PPM protections: More households, including over 75s and under 2s included in the protected category exempt from involuntary installation of a prepayment meter in their home. 

Ofgem will also soon launch a call for input regarding standing charges, asking consumers, charity, suppliers, and customer representatives for feedback, as the regulator continues to explore options around this issue.