Energy Suppliers will have to pay compensation for any switching blunders says Ofgem

With complaints over switching now being the second most common, Ofgem believes that the new measures will lead to improved performance from energy suppliers and increase the number of consumers switching for cheaper deals.

“The introduction of automatic compensation is a welcome intervention by Ofgem. It offers consumers access to immediate redress and gives suppliers a financial incentive to get switches right first time. Switching is now second only to billing as a source of complaints that we handle, so it’s clear that far too many people in the process of changing supplier doesn’t go as smoothly as it should,” said David Pilling from the Energy Ombudsman.

The new rules come into force on May 1st and will see customers automatically receive a £30 payment from suppliers if their switch takes longer than 15 days, if their final bill doesn’t arrive within 6 weeks and if they are switched by mistake.

Since measures were introduced last year by Ofgem to force suppliers to give customers payments for failing to meet the minimum switching standards or failing to refund credit balances, suppliers have forked out £700,000.

“We are introducing these new standards to give customers further peace of mind, and to challenge suppliers to get it right first time. More customers are switching than ever, with a record 6.4 million changing supplier in 2019. But we also know that a minority can still experience problems when they switch. As part of our commitment to protecting consumers and enabling competition, we are introducing these new standards to give customers further peace of mind, and to challenge suppliers to get it right first time,” said Mary Starks, from Ofgem.

In October 2018, Ofgem announced plans to launch a faster switching program for consumers that combines electric and gas registrations. To do this the Centralised Switching Service was announced.

The service is expected to go live in the middle of 2021 and will aim to switch consumers supplier within 24 hours for domestic and within 2 days for non-domestic.

The new changes will need all key industry bodies to co-operate. As this has been an issue in the past, Ofgem is likely to implement statutory licence conditions in order to force suppliers, distributors and data communication companies will be compliant.

Details for the switching service’s delivery under REC v1.0 have already been published, however, a consultation is now taking place to finalise REC v2.0 which will be in place when the CSS goes live in 2021.

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