Ofgem demands action from energy companies on poor consumer complaints handling

Press release
  • Ofgem research shows increased dissatisfaction with most suppliers’ handling of complaints
  • Ofgem chief executive writes to companies’ CEOs requiring improvement and to get them to account to customers
  • Customers voting with their feet in response to bad service

Ofgem has today urged energy suppliers to significantly improve the way they handle customers’ complaints.

Research commissioned by Ofgem highlights that over half of those who had complained (57% of domestic and 52% of small business consumers) were not satisfied with the way their complaint had been handled by their energy supplier. Furthermore in nearly half of cases where the supplier considered the case resolved, the customer did not. Satisfaction with npower and Scottish Power has fallen particularly markedly, with only SSE managing to maintain levels of satisfaction found two years ago.

Today, Ofgem has written to the Big Six CEOs and smaller and independent suppliers about the industry-wide failure to handle complaints to an acceptable standard. Ofgem has highlighted the key areas customers were most concerned about and where suppliers must do most to improve. These include:

  • improving the speed of resolving a complaint
  • communicating better with consumers during the complaint process
  • being more proactive in resolving complaints.

Many customers are now responding to suppliers’ poor service by switching supplier. Nearly one in two customers had either already switched or planned to do so as a result of their complaints experience.

Dermot Nolan, Ofgem chief executive said: “These satisfaction scores are frankly awful. Almost all energy suppliers need to improve their complaints handling as a matter of urgency. There are real business benefits to good complaints handling schemes, and it shouldn’t need a regulator to tell companies about the importance of this.

“Suppliers must now tell their customers what steps they will be taking to put things right. We are already formally investigating npower about complaints handling and other customer service issues, and this should send a strong signal to all suppliers that, where necessary, we will take action.”

Ofgem now plans to bring forward the next survey of complainants, to see whether the necessary improvements have happened and decide if more regulatory action is needed.

- ends -

Notes to editors

1. Complaints to Energy Companies report

View the Complaints to energy companies research report 2014.

This survey is commissioned by Ofgem every two years. Following disappointing results this year, the next survey will be carried out in 2015.

View the 2012 research report.

2. Complaints data

Ofgem has shone a light on individual supplier performance by ensuring suppliers publish their complaints data quarterly since 2013.

3. Advice for consumers

We've provide a Complaints factsheet for consumers, alongside a video on making a complaint.

4. About Ofgem

Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority's functions are set out mainly in the Gas Act 1986, the Electricity Act 1989, the Competition Act 1998 and the Utilities Act 2000. In this note, the functions of the Authority under all the relevant Acts are, for simplicity, described as the functions of Ofgem.

For further press information contact:

Lisa O’Brien: 020 7901 7426

Dafydd Wyn: 020 3263 9943

Out-of-hours media contact number: 07766 511470