Ofgem Announces New Rules to Improve Customer Service

Energy regulator Ofgem has today (Wednesday 26 July) proposed a series of reforms to further improve standards of customer service for both businesses and households. 

Following extensive engagement with energy suppliers, businesses, consumers and other organisations, Ofgem is today announcing the publication of:

A Non-Domestic Market Review findings and consultation: non-domestic refers to anything that is not a household. Many businesses throughout the country are struggling with energy market issues. The review summarises the challenges they face, and proposes a number of actions for the sector, Ofgem and Government to address.

A Consumer Standards Statutory Consultation: There has been a decline in overall consumer satisfaction with customer service by domestic energy suppliers since 2018. Considerable work is already underway to address this. Ofgem is proposing new rules to ensure that all domestic customers, regardless of which supplier they are with, can contact their supplier and get support if they are struggling to pay.

Minimum Capital Requirements for supplier finances: Ofgem wants all energy suppliers to be financially secure to ensure consumers benefit from a stable energy market. To that end, Ofgem is today announcing a decision on the level of capital that suppliers are required to hold to ensure they are more resilient to severe but plausible market shocks. Ofgem is also proceeding with proposals to have the power to direct suppliers to ringfence a portion of their customer credit balances when it is deemed to be in the consumer interest.

Ofgem’s proposals would establish expectations to ensure all consumers receive a consistent and acceptable level of service regardless of the company they are with.

The regulator is taking these steps to drive up standards before this winter to make sure customers – particularly those in a vulnerable situation – are properly served, and to strengthen protections for business energy customers.

For households, the proposals include: 

– Requiring energy supplier enquiry lines to stay open longer, including evenings and weekends – and be easier to contact via multiple methods such as email, webchat or other digital-based platforms.

– Enabling more effective support for customers struggling with bills, including early intervention to identify and offer support such as temporary repayment holidays when consumers are unable to pay.

– Prioritising customers in vulnerable situations, or their representatives, who may need immediate assistance.

– Making 24/7 emergency support available for customers who are cut off from their power or gas supply due to issues with their supplier (e.g. meter faults).

– Compelling suppliers to make information available on customer service performance to help inform consumer choice when switching, and further drive improvements in service.

For the non-domestic market, some of the immediate changes Ofgem has taken to help the non-domestic energy market include working with industry to adapt the Retail Energy Code to avoid excessive delays and unreasonable requests for documentation during tenancy changes and urging suppliers to be more flexible with businesses who signed up for peak fixed rate prices.

Neil Lawrence, Director at Ofgem, said:

“Suppliers are short-changing too many of their customers, who deserve better.

“Customers need more support when they are struggling and should be able to contact their supplier without frustration or undue delay when they need help.

“The plans we are announcing put the welfare of business and domestic consumers first and set out a comprehensive package to tackle poor behaviour by energy suppliers.

“Good customer service is important for all consumers, but it can make a critical difference to welfare and the safety of the most vulnerable.

“While we have seen good practice from some suppliers, we expect every company to raise the bar to provide a consistent service that customers can rely on – and this mission should be driven from the top.

“We believe these recommendations can make a positive difference to consumers and we aim to have changes in place before the cold winter months return.”

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