UK: Ofgem looking to avoid winter of discontent for customers

“My message to suppliers today is simple – be proactive. Help your customers to know what support is available, and then deliver it.”

The recent message from Ofgem Director of Retail, Neil Lawrence, ahead of the winter peak, sends a clear statement to suppliers: they have the tools in place to help customers; use them. Ofgem’s message follows its third ‘deep dive’ into how energy suppliers are helping customers this winter and beyond, as part of Ofgem’s ongoing ‘energy aware’ winter campaign.

Ofgem’s trilogy of investigations has identified some good practice, but also that a number of suppliers have further improvements to make: five suppliers had severe weaknesses, five had moderate weaknesses and seven had minor weaknesses. We note that a number of those suppliers have disputed Ofgem’s findings and commented that Ofgem has not taken into account all of the information provided to it.

Ofgem’s latest review focused on how suppliers are:

• identifying and recording vulnerable customers and if they are adding them to the Priority Services Register;
• making free gas safety checks available;
• ensuring that vulnerable customers of prepayment meters are identified and supported; and
• providing useful information appropriate to customer needs.

Ofgem did recognise that suppliers have engaged positively in its Market Compliance Review and that swift actions to improve have been implemented since suppliers received indicative ratings in October 2022. Continued improvement will likely remain Ofgem’s focus when assessing compliance against licence conditions, not least because of the spiralling energy costs facing customers in a wider cost-of-living crisis and with reduced, planned Government support.

Ofgem’s announcement is in keeping with its mission statement to focus on improved customer service and confirms that the days of intensive supplier scrutiny are not over. The announcement follows changes to its Enforcement Guidelines and its Statement of Policy with respect to Financial Penalties and Consumer Redress announced earlier this year which indicated a shift to formal enforcement action. You can read our summary of the changes here.

Louise Howarth, Partner, comments:

“Ofgem has been accused of being asleep at the wheel when bills are soaring and suppliers are failing, but it has clearly prioritised supplier conduct this calendar year. Suppliers’ initiatives have been praised and protections for vulnerable customers have improved, but Ofgem has made it clear that focus must continue. Licensees should continue to engage with Ofgem’s Market Compliance Reviews and must get ahead of the curve on customer service.”

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