Raising supplier standards of conduct – our new rules
Blog
Neil Barnes
Publication date
Industry sector
Supply and Retail Market
Last week, important changes to the Standards of Conduct went live. These are the overarching rules requiring suppliers to treat each customer fairly. Our changes will further focus suppliers’ minds on this obligation.
The new rules clarify the special responsibility that suppliers have for vulnerable customers, and the importance of suppliers ensuring that all households have the information they need to engage with the market. The Standards put responsibility on suppliers to determine how best to do this, and reinforce our expectation that they must put consumers at the heart of their businesses.
In doing so, suppliers will need to monitor their customers’ experiences, and use a range of methods to keep in touch with what their customers need.
A sharper focus on vulnerable consumers
We have introduced a tough new, overarching rule that sets out the clear requirement that, as an essential service provider, energy suppliers have a special responsibility for vulnerable consumers. We’re seeing improvements in supplier conduct towards vulnerable consumers, but it’s not going far or fast enough.
This week we published a report on vulnerable consumers in retail energy market. The report shows that a lot more can be done to raise standards and we urge industry to improve their performance in this area.
Many suppliers run extra schemes to help vulnerable customers. This is a practice we want to see more of. We know that energy companies are more than capable of delivering imaginative, effective services for vulnerable consumers that improve their experiences.
They must do more to identify signs of vulnerability and then take steps to give those customers extra support, recognising their specific circumstances.
Our changes to the Standards make clear that we expect to see them deliver on this, and complement measures we announced earlier this week to provide further price protection for vulnerable customers.
Doing more to help all consumers make informed choices
We already know that different consumers have different information needs. Suppliers need to make sure all consumers can quickly and easily find, access and understand this information.
We’d like to see suppliers taking this much more seriously, innovating, and assuring themselves – and us – that they are committed to putting the consumer first.
So suppliers should think hard about the purpose, channel, content, presentation, volume and frequency of the information they provide. This will help the energy market to catch up with other sectors in finding new ways to engage customers, for example by making better use of digital tools and doing a better job of tailoring communications to meet specific customer needs.
We’ve also prioritised further reforms to rules covering supplier-customer communications. We’re reviewing the detailed rules on bills and other communications, to remove barriers to innovation and drive competition. We plan to consult on our proposals in the New Year.
This isn’t about letting suppliers do what they want. It's about enabling them to do what consumers want – in a world where technology provides more options, consumers increasingly prefer personalised approaches and we need to make sure our rules enable this.
We’ll be watching suppliers closely
Some of Ofgem’s toughest enforcement penalties have been a result of supplier failure to meet these Standards, which have been in place since 2013, and the rules now play a larger role in how we regulate supplier conduct.
Last week’s changes set the tone for what we expect of suppliers going forward. They should think hard about whether they are living up to these expectations. We will be watching closely to ensure that suppliers are treating customers fairly, and stand ready to act if they don’t.
We’ve seen some improvements. But we expect more from suppliers and our new rules make this crystal clear.