Setting up energy contracts: good practice

Help to raise standards

We are getting new powers to help households and businesses get a better experience when using a service to choose and set up an energy contract.

We still need to create the new rules with your help. This guidance outlines the experiences that we expect your customers to have when you work with them.

Use this guidance to help get ready for when the rules come in.

Outcome 1: customers get clear, accurate and timely information to help them make informed choices

Make sure that you do not mislead the customer, instead you should:

• make it easy for customers to understand who you are, what you do and your role, so that they know whether you are acting on behalf of an energy supplier or as an impartial intermediary
• make it clear whether you searched all energy suppliers or only certain ones to find offers for customers
• make sure that all offers you share are up to date and accurately presented

Before the customer agrees to the contract:

• set out the most important terms of the energy contract, these are called principal terms and include:
  • pricing
  • length of contract
  • contract start date
  • contract renewal terms including if the contract will automatically renew
  • termination of contract conditions
  • early exit fees
• explain the services you will provide and what the customer can expect you to do for them
• clearly explain your commission or fee arrangements, including how much you’ll receive and how the customer pays their fees, for example by either sending it to you or paying through their energy bill
• check that they understand all the information you have provided

Outcome 2: customer concerns and complaints are treated fairly, effectively and promptly

This could include making sure that you have a complaints process and reminding customers about what they can do if there is a problem.

Your complaints process should:

• explain how customers can make a complaint and escalate if needed
• be clear, transparent and easy to use

If you have micro or small business customers you must sign up to a Qualifying Dispute Settlement Scheme (QDSS), also known as an Alternative Dispute Resolution (ADR) scheme.

Outcome 3: customers are charged prices that represent fair value

You need to review the fees you charge and consider the benefits provided, and check charges remain reasonable.

We would expect any commission or fees you get to reflect the services and benefits given to customers

Law

You must follow the rules in:

• Misrepresentation Act 1967
• Fraud Act 2006
• The Privacy and Electronic Communications (EC Directive) Regulations 2003
• The Business Protection from Misleading Marketing Regulations 2008
• The Data Protection Act 2018

Voluntary codes of practice

You can also follow codes of practice such as:

• RECCo TPI code of practice
• Utilities Intermediaries Association TPI code of practice