Ofgem investigated whether EDF Energy plc (EDF) might have breached Regulation 3(4) read together with Regulation 6(1) of the CPRs.
These regulations prohibit commercial practices which amount to misleading omissions, in other words, which omit or hide material information and as a result cause, or would likely cause, the average consumer to take a transactional decision he would not otherwise have taken.
Ofgem was concerned that consumers may have taken decisions to use the IVR system but without EDF having informed them of the financial consequences of doing so, especially when compared to them providing meter readings directly to EDF’s customer service operators.
Ofgem decided to close the investigation, on the basis that:
• EDF rectified the problem in April 2010 and took steps to ensure it will not arise again;
• EDF agreed to compensate consumers who suffered loss with a compensation package which appeared reasonable;
• Ofgem’s enforcement powers in respect of breaches of the CPRs extend to seeking a court order or formal undertakings that the conduct giving rise to the breach will not happen again, and EDF took steps of its own volition to ensure the problem would not happen again
Further details can be found in the decision document.
Following closure of this investigation, Ofgem wrote to all domestic suppliers on 16 August 2011 indicating that we consider it essential that any system which is used to assess customers’ bills must operate in a way that ensures customers are billed as accurately and fairly as possible, and that consumers understand and have confidence in the process. You can read this letter by following the link below.
Noting that Energy UK operates the "Code of Practice for Accurate Bills" ("the code") which requires that the suppliers which are party to it use all available information to produce accurate, clear and timely bills, Ofgem wrote to Energy UK to draw its attention to the issue so that they might consider whether suppliers are acting in compliance with the code.