Maxen Power – an energy company supplying more than 10,000
non–domestic customers - has paid £1.65million for customer
service failures.
A recent investigation carried out by energy regulator Ofgem
found that Maxen Power breached its licence conditions by not
having robust systems in place to protect its customers. This
allowed third-party reps to sign up new customers without their
consent by claiming to work for other suppliers.
Ofgem also found evidence that the east London-based supplier put
unreasonable requirements on customers to evidence a change of
tenancy by asking for a large number of documents. The time taken
to pull these documents together risked tenants being locked into
a more expensive ‘deemed rate' tariff which can lead to a
build-up of debt and financial difficulty.
Maxen Power also failed to put an adequate complaint handling
process in place, and as a result, had an unusually high number
of complaints for an organisation of its size. The majority of
complaints related to poor communication with customers,
difficulty changing tenancy and mis-selling tariffs.
Dominic Alexander, deputy director of enforcement at
Ofgem, said: “Our duty is to protect energy consumers,
and we expect all suppliers to treat their customers
fairly.
“But it's clear that Maxen Power fell significantly short of our
standards. And it's concerning to hear that some business
customers faced debt and financial difficulty because of their
supplier's failure to provide an easy, transparent and reliable
service.
“Earlier this year we issued Maxen Power with a provisional order
requiring them to improve their customer service and ordering
them to commission an independent report into the start-to-end
customer journey and identify any improvements.
“Today's outcome serves as a reminder to all non-domestic energy
suppliers that this behaviour is unacceptable, and that we will
take action quickly if standards aren't up to scratch.”
As a result of these licence breaches, Maxen Power has paid
£1.65million to the Energy Industry Voluntary Redress Fund which
provides money to charities that deliver energy-related projects
and support energy consumers in vulnerable
situations.
The regulator has increased its monitoring of Maxen Power and has
been working closely with the supplier to update its policies,
processes and contractual terms to better serve its customers.
This includes updating its deemed rates policy to safeguard
customers from volatile price changes and updating its change of
tenancy policy to make it easier to change suppliers.
Notes to editors
- A "deemed rate” means rates charged in terms of a deemed
contract created by paragraph 3 of Schedule 6 to the Electricity
Act 1989.
- Energy companies regulated by Ofgem that breach their licence
conditions may be asked to pay a sum of money to the Energy
Industry Voluntary Redress Scheme to remedy any harm caused to
consumers.
- The Energy Redress Fund provides money to charities to
deliver energy related projects that support energy consumers in
vulnerable situations. It also helps to deliver benefits to
consumers who were negatively impacted by the specific issue that
triggered the redress payment.
- Ofgem's new consumer standards
framework can be found on our website.
On licensees
- The obligation for licensees to comply with licence
conditions is enforceable by the Authority (Ofgem) as a relevant
condition for the purposes of section 25 of the Electricity Act
1989 and section 28 of the Gas Act 1986. If the Authority
considers that a licensee has contravened (and continues to
contravene) a licence obligation, it may take enforcement
action.
- SLC 0A requires that suppliers must ensure that each
non-domestic consumer is treated fairly.
- SLC 4A requires licensees to maintain robust internal
capability, systems and processes to enable them to efficiently
and effectively serve each of its customers, efficiently and
effectively identify likely risks of consumer harm and to
mitigate such risks and comply relevant legislative and
regulatory obligations.
- SLC 5A requires the licensee to be open and cooperative with
the Authority (Ofgem), including the disclosure in writing or
verbally of any circumstance relating to the licensee of which
Ofgem would reasonably expect notice to perform its statutory
functions.
- SLC 7.3 requires licensees to take all reasonable steps to
ensure the terms of their Deemed Contracts are not unduly
onerous.
