Ofgem requires suppliers to improve help for customers in payment difficulties, following review.
The review found three suppliers were found to have severe weaknesses in how they support customers in payment difficulties, as part of Ofgem review; five suppliers were found as having some issues in the support they provide, and all of those identified have been asked to submit information to Ofgem, to set out how they will improve; and other key findings include companies being unable to identify customers in payment difficulty and a lack of help given to those requiring crucial payment plans.
Ofgem publishes Market Compliance Review
Energy regulator - Ofgem has on Tuesday, 27 September 2022, 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 majority of suppliers were found to have minor or moderate issues
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.
Ofgem issues Provisional Orders
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 include:
- One supplier was found to have no significant issues (British Gas).
- Eight suppliers (Ecotricity, EDF, E.ON, Octopus, OVO, Shell, UW and SO Energy) were found to have ‘minor’ issues.
- Five suppliers (E, Good, Green Energy, Outfox and Bulb) were found to have ‘moderate’ weaknesses.
- Three suppliers (TruEnergy, Utilita and ScottishPower) were found to demonstrate ‘severe’ weaknesses in the way they deal with customers having payment difficulties, with Utilita and ScottishPower being issued with enforcement notices.
Among 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.
Prioritizing vulnerable customers is important
Energy suppliers have been facing demands of their own over the past year
Energy suppliers have been facing demands of their own over the past year. However, prioritizing vulnerable customers struggling to pay their bills during this winter is critical.
Jonathan Brearley, Ofgem’s Chief Executive Officer (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.”
Working with companies to step up to the energy crisis
He adds, “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.”
Jonathan Brearley continues, “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:
- Adequate training materials so staff can do their jobs to support customers – (For example - customer service operators lacking relevant training in order to ascertain a customer’s vulnerability / circumstances).
- Management oversight on the quality of customer engagement.
- Evidence of policies or processes to identify thresholds for important payment plans and how suppliers ensure these are being set in a fair and consistent manner.
- Clarity over how payment plans are reassessed if customers’ circumstances change.
- Information provided on company structures to understand how issues are identified, raised, and dealt with from ground level to executive level.
- Clear company governance, including escalation routes and levels of delegation and decision-making - meaning customer risks are left exposed.
Next market review to cover customer vulnerability
As well as publishing the outcome of the review, 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.
