Ofgem says energy suppliers are failing to support customers in need
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UK energy regulator Ofgem has warned suppliers that they will need to improve help for customers who are finding it difficult to make their payments, following a review.
The UK is currently facing a cost-of-living crisis, with inflation hitting historic levels. The rising prices of energy bills – prompted by the Russian invasion of Ukraine – could leave as many as 40 per cent of British families facing fuel poverty in the winter.
In its Market Compliance Review, Ofgem found that all bar one of the gas and electricity suppliers assessed had issues in the support they provide.
The regulator has asked those identified to submit information setting out how they will improve.
Key findings include companies being unable to identify customers in payment difficulty and a lack of help given to those requiring crucial payment plans.
The deep dive found that, although good practice exists across the industry, with one supplier, British Gas, 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.
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.
Eight suppliers – Ecotricity, EDF, E.ON, Octopus, OVO, Shell, UW and SO/ESB – were found to have ‘minor’ issues, while five others – E, Good, Green Energy, Outfox and Bulb – were found to have ‘moderate’ weaknesses
While Ofgem admitted that energy suppliers have been facing demands of their own over the past year, it said that prioritising vulnerable customers struggling to pay their bills during this winter is critical.
Yesterday, Octopus Energy’s Greg Jackson called on Ofgem to drive down the cost of standing charges for energy bill payers, after announcing that his firm will knock 4 per cent off the standing charge for customers whose bills are regulated by the energy price cap.
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.”
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