Utility Warehouse pays £1.5 million to Ofgem for inadequate support of struggling customers

According to the energy regulator, Utility Warehouse failed to provide consistent support to its customers struggling to pay their energy bills. No debt repayment plans were in place and energy efficiency advice was found wanting.

The report shows that the company also did not provide struggling customers with the option to have pre-payment meters installed.

The failings were first brought to the regulator’s attention following an audit in 2018. Since then, Utility Warehouse implemented the measures expected of it.

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Inadequate services

By not providing adequate services to its struggling customers, Ofgem said that the supplier had left its customers disadvantaged and in a needlessly difficult position.

“Energy suppliers are required to look after their customers, especially those in vulnerable situations.

Between 2013-2019, Utility Warehouse failed to take the necessary steps to treat some customers in payment difficulty fairly, depriving them of the opportunity to manage their energy debt and ongoing energy costs.

“While the unprecedented and unexpected rise in gas and electricity prices over recent months has put energy markets under severe strain, we expect suppliers to continue to comply with their licence obligations and treat people fairly, including by providing support to vulnerable consumers. Where we see poor behaviour, Ofgem will be ready to step in and take swift action,” said Cathryn Scott, director of enforcement and emerging Issues at Ofgem.

Utility Warehouse accepted the findings and said that it “had failed to consistently treat customers fairly, which resulted in some customers facing increased financial hardship.”

As a result the company paid £1.5 million into the Voluntary Redress Fund.

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Three million households in debt

This should act as a wake up call for other energy suppliers who have reduced their services in order to cut costs during the Covid-19 pandemic and the current energy crisis.

Even with energy suppliers facing unprecedented challenges, Ofgem will have little tolerance for those companies that fail to provide proper support and services to their customers.

The Utility Warehouse payment comes as new data from Uswitch that shows that up to three million households across the UK owe money to their energy supplier.

Some suppliers may be considering chasing those payments in an attempt to stay afloat but as we’ve seen in recent weeks, Ofgem has little patience or tolerance of those companies that chase them aggressively.

What’s most worrying about the new data is that the data set covers a period before the recent spike in inflation and the related hike in gas prices, in particular, households owed a total of £510m, a rise of £77m in 12 months.

What this situation will look like during what is looking like a particularly tough winter for many households is likely to make for very grim reading.

Customers will need more support than ever and with suppliers already stretched to breaking point due to the crisis engulfing the sector it may fall to the government to intervene.

Also read: Ofgem issues a warning to energy suppliers over the use of threatening language towards customers